<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
International
Table of Contents October 31, 1999
<TABLE>
<S> <C>
Letter To Shareholders...................................................... 1
Management Discussions...................................................... 2
Schedules of Investments:
TCW Galileo Asia Pacific Equities Fund.................................... 16
TCW Galileo Emerging Markets Equities Fund................................ 19
TCW Galileo Emerging Markets Income Fund.................................. 25
TCW Galileo European Equities Fund........................................ 29
TCW Galileo International Equities Fund................................... 32
TCW Galileo Japanese Equities Fund........................................ 33
TCW Galileo Latin America Equities Fund................................... 37
Statements of Assets and Liabilities........................................ 40
Statements of Operations.................................................... 42
Statements of Changes in Net Assets......................................... 44
Notes to Financial Statements............................................... 48
Financial Highlights........................................................ 60
Independent Auditors' Report................................................ 68
Tax Information Notice...................................................... 69
</TABLE>
[LOGO] TCW GALILEO FUNDS INC.
THE POWER OF INDEPENDENT THINKING(TM)
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
To Our Shareholders
We are pleased to submit the October 31, 1999 Annual Reports for the TCW
Galileo Funds. In this report we have incorporated a discussion and analysis of
how each Fund's performance over the last year has compared to the benchmark as
well as a graphical analysis of each Fund's performance since inception.
TCW is committed to providing you with superior professional investment
management and distinctive personal service through the TCW Galileo Funds. On
March 1, 1999, we created an additional class of shares (N class) on nine of
our Galileo Funds.
Now individuals can purchase our Select Equities Fund, Aggressive Growth
Equities Fund, Large Cap Growth Fund, Large Cap Value Fund, Small Cap Growth
Fund, European Equities Fund, Core Fixed Income Fund, High Yield Bond Fund or
Total Return Mortgage- Backed Securities Fund with a low initial investment of
$2,000. The Galileo Mutual Funds continue to provide our clients with targeted
investment strategies featuring daily liquidity, competitive management fees
and no front end loads, or deferred sales charges.
Please call our Shareholder Services Department at (800) FUND-TCW [(800) 386-
3829] if you have any questions or would like further information on the TCW
Galileo Funds.
/s/ Marc I. Stern
Marc I. Stern
Chairman of the Board
December 6, 1999
1
<PAGE>
TCW Galileo Asia Pacific Equities Fund
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Management Discussions
The TCW Galileo Asia Pacific Equities Fund (the "Fund") total return for the
year ended October 31, 1999, was 64.44%. This compares favorably to the 49.28%
return of the Fund's benchmark, the Morgan Stanley Combined Far East Free ex-
Japan Index, for the same period.
During the Fund's fiscal year, the Asian equity markets surged to new recovery
highs. The driving forces have been abundant liquidity, low interest rates,
stable currencies and recovering economies. Asia appears to be finally on the
mend, moving from the "bust" part of the economic cycles typical of emerging
markets into the recovery part of the cycle, which could eventually lead to an-
other seemingly "boom" period of sustainable growth.
Over the next few months, we expect to see increased concerns about the Y2K
computer bug, particularly in the lesser-developed economies of Southeast Asia,
where the Fund is significantly underweight. The Fund has also reduced its ex-
posure to interest-rate sensitive stocks, and is currently focused on cyclical
growth plays which are available at attractive valuations in Asia. With respect
to specific country holdings, the Fund was overweight in Korea and Taiwan, due
to improved prospects for a stronger than expected economic recovery. The Fund
had no exposure to Malaysia due to ongoing capital controls on foreign invest-
ors. The Fund also continued to avoid Indonesia due to continued political
risk. Other Asian holdings were relatively neutral.
Whereas previously Asia had been driven very much by the asset and services cy-
cle of property and banking, the new sources of growth are based on the much
sounder basis of tradable goods, such as the exports derived from the industri-
alized economies of Korea and Taiwan. Such growth provides a much sounder foun-
dation to the longer-term prospects for Asia. In addition, improving prospects
for a recovery in Japan are an added bonus for the region, particularly for in-
creased export growth. Although we remain concerned that a degree of compla-
cency could thwart some of the much needed reforms that certain countries have
begun embarking upon, we remain extremely positive on the outlook for Asia and
consider it the most attractive of the Emerging Markets regions.
2
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
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TCW Galileo Asia Pacific Equities Fund
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Average Annualized Total Return /(1)/
1-Year 3-Year 5-Year Since Inception
<S> <C> <C> <C>
64.44% 2.83% 1.51% 10.17%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1993 1 APR 260,747.50 271,375.00
MAY 282,603.36 286,626.28
JUN 278,864.51 278.744.05
JUL 284,578.45 279,914.78
AUG 306,547.90 302,839.80
SEP 319,790.77 313,954.02
OCT 385,207.17 371,376.21
NOV 395,557.69 368,368.06
DEC 485,139.64 457,402,62
1994 JAN 458,447.26 425,750.36
FEB 430,647.01 400,843.96
MAR 380,261.31 356,310.20
APR 396,627.76 372,237.27
MAY 413,424.95 387,647.89
JUN 391,029.72 369,777.32
JUL 407,824.44 382,893.21
AUG 438,399.04 421,006.68
SEP 432,800.69 413,512.77
OCT 438,829.60 421,080.05
NOV 391,457.94 380,403.72
DEC 376,453.36 370,475.18
1995 JAN 333,341.92 330,315.67
FEB 362,232.67 363,248.14
MAR 360,454.10 363,938.31
APR 358,677.07 359,753.02
MAY 401,790.05 402,995.34
JUN 396,458.30 396,426.51
JUL 414,679.52 402,055.77
AUG 395,612.55 382,314.83
SEP 396,514.55 388,431.87
OCT 390,658.03 382,022.74
NOV 384,802.07 377,476.67
DEC 402,375.98 395,746.54
1996 JAN 444,703.07 431,482.46
FEB 438,872.98 429,368.19
MAR 436,621.56 432,030.27
APR 452,392.33 443,349.47
MAY 449,239.16 438,295.28
JUN 431,664.92 428,871.93
JUL 408,342.06 397,221.19
AUG 425,998.78 410,806.15
SEP 435,507.07 420,665.50
OCT 435,054.14 412,252.19
NOV 470,819.94 435,338.31
DEC 484,403.10 432,116.81
1997 JAN 485,308.93 437,820.75
FEB 486,667.80 439,002.87
MAR 460,412.07 413,935.80
APR 454,528.00 402,759.53
MAY 496,630.93 422,333.65
JUN 541,451.87 432,934.22
JUL 545,550.66 434,233.03
AUG 464,934.64 353,639.38
SEP 455,755.43 350,491.99
OCT 337,592.86 264,411.15
NOV 320,645.70 247,171.55
DEC 313,161.83 235,579.20
1998 JAN 306,557.25 215,248.72
FEB 340,680.13 264,196.27
MAR 331,325.06 257,274.33
APR 309,308.51 230,286.25
MAY 265,278.44 193,993.14
JUN 248,767.51 172,324.11
JUL 244,128.00 167,102.69
AUG 226,045.44 140,817.43
SEP 241,303.50 155,631.43
OCT 287,643.43 197,807.54
NOV 301,772.47 215,465.82
DEC 306,293.02 218,167.77
1999 JAN 305,726.38 210,723.88
FEB 301,770.28 206,629.52
MAR 330,592.36 229,110.81
APR 392,753.64 281,726.11
MAY 387,667.48 268,682.19
JUN 461,696.47 314,825.67
JUL 463,390.89 302,216.90
AUG 479,215.69 306,846.86
SEP 450,395.66 282,013.74
OCT 473,001.02 295,288.13
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the Fund's registration became effective. The
predecessor limited partnership was not registered under the Investment
Company Act of 1940, as amended ("1940 Act"), and, therefore was not sub-
ject to certain investment restrictions that are imposed by the 1940 Act.
If the limited partnership had been registered under the 1940 Act, the lim-
ited partnership's performance may have been lower.
3
<PAGE>
TCW Galileo Emerging Markets Equities Fund
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Management Discussions (Continued)
The TCW Galileo Emerging Markets Equities Fund (the "Fund") total return for
the fiscal year ended October 31, 1999, was 41.29%. This compares to the Fund's
benchmark, the International Finance Corporation ("IFC") Composite Investable
Index, which posted a 43.26% return for the same period.
The emerging equity markets rallied during the Fund's fiscal year, reflecting
the improved outlook for Asia and Latin America. Stock prices surged early in
1999 on the back of rebounding commodity prices, stability in Brazil, and lower
interest rates, which have created a more optimistic outlook for global eco-
nomic growth. Despite concerns about higher U.S. interest rates, the emerging
markets were encouraged by favorable news regarding signs of stronger economic
growth in Japan and Europe.
The Fund has generally reduced its exposure to interest-rate sensitive stocks,
and is currently focused on cyclical growth plays. With respect to specific
Asian holdings, the Fund was overweight in Korea and Taiwan, due to improved
prospects for a stronger than expected economic recovery. The Fund had no expo-
sure to Malaysia due to ongoing capital controls on foreign investors. The Fund
also continued to avoid Indonesia due to continued political risk. Other Asian
holdings were relatively neutral. In Latin America, the Fund maintained an un-
derweight allocation to Chile given the weakness in copper prices and concerns
about the currency. The Fund was unexposed to Colombia and Venezuela. The Fund
remained neutrally weighted in Mexico on relatively sound earnings prospects.
In the Emerging Markets EuroAsia region, there were overweight positions in Po-
land and Hungary as a result of positive economic outlooks. The Fund re-estab-
lished a position in South Africa and was neutrally weighted at the end of the
period under review.
The outlook for the emerging markets has improved considerably due to abundant
liquidity flows into most regions. These liquidity flows have helped to bring
down interest rates and allowed economies to start recovering, most notably in
Asia. The World Bank recently issued an updated report, forecasting a pick-up
in economic growth for all emerging markets regions in 1999 and 2000. Acceler-
ating GDP growth is supportive for corporate earnings growth and the region's
equity market performance. Although the emerging markets have corrected in re-
cent months, given our expectations for continued improvements in fundamentals
throughout this year and next, we view the present weakness as a buying oppor-
tunity for the longer term. In addition, closure to the Y2K issue will likely
remove a key impediment to global portfolio flows into the asset class.
4
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
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TCW Galileo Emerging Markets Equities Fund
[PERFORMANCE GRAPH APPEARS HERE]
Average Annualized Total Return /(1)/
<TABLE>
<CAPTION>
1-Year 3-Year 5-Year Since Inception
- ------ ------ ------ ---------------
<S> <C> <C> <C>
41.29% -0.88% -3.86% 3.09%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1993 MAY 250,000.00 250,000.00
1-JUN 254,500.00 257,096.46
JUL 259,793.60 265,078.74
AUG 278,005.13 286,604.33
SEP 283,815.44 298,139.76
OCT 320,370.87 323,238.19
NOV 335,972.93 343,730.31
DEC 404,276.22 402,450.79
1994 JAN 408,561.55 405,236.22
FEB 380,329.95 394,714.57
MAR 337,733.00 354,901.57
APR 332,406.95 348,159.45
MAY 340,394.68 356,348.43
JUN 321,758.08 343,592.52
JUL 336,591.12 368,277.56
AUG 371,960.12 415,620.08
SEP 376,903.47 425,935.04
OCT 370,058.90 411,929.13
NOV 352,943.68 396,092.52
DEC 311,486.91 353,484.25
1995 JAN 273,834.37 306,830.71
FEB 269,259.56 302,864.17
MAR 265,467.47 302,076.77
APR 275,735.75 314,753.94
MAY 292,470.15 326,535.43
JUN 289,808.68 328,494.09
JUL 300,076.60 338,946.85
AUG 293,231.85 329,862.20
SEP 287,906.76 327,362.20
OCT 273,453.84 315,009.84
NOV 273,453.84 313,435.04
DEC 283,809.54 324,340.55
1996 JAN 310,513.18 351,515.75
FEB 301,359.25 343,710.63
MAR 307,082.06 348,730.31
APR 323,867.17 362,795.28
MAY 326,917.99 359,606.30
JUN 325,773.78 363,877.95
JUL 305,243.52 339,970.47
AUG 317,453.26 350,511.81
SEP 317,834.20 355,679.13
OCT 312,110.01 348,041.34
NOV 322,028.86 353,188.98
DEC 330,443.48 354,753.94
1997 JAN 353,445.65 379,793.31
FEB 367,247.70 398,395.67
MAR 357,662.54 388,415.35
APR 358,045.24 381,820.87
MAY 376,828.29 394,803.15
JUN 406,729.61 411,850.39
JUL 418,118.04 415,826.77
AUG 372,217.04 362,736.22
SEP 382,244.57 374,537.40
OCT 320,917.25 313,090.55
NOV 317,444.93 298,513.78
DEC 330,945.86 302,460.63
1998 JAN 305,873.40 282,627.95
FEB 321,301.66 311,486.22
MAR 330,172.79 323,699.60
APR 330,172.79 324,576.82
MAY 287,745.59 284,085.86
JUN 262,288.74 254,972.74
JUL 274,962.53 265,141.06
AUG 196,952.91 190,601.95
SEP 196,952.91 199,775.62
OCT 215,104.09 222,717.86
NOV 221,669.07 239,470.69
DEC 219,738.33 235,897.79
1999 JAN 217,035.55 230,443.83
FEB 214,717.61 234,548.04
MAR 236,730.46 261,654.75
APR 264,148.58 297,334.00
MAY 263,377.27 292,008.75
JUN 300,065.72 323,849.38
JUL 294,271.45 319,143.85
AUG 300,836.65 322,568.26
SEP 297,361.98 313,591.19
OCT 303,927.74 319,044.54
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the Fund's registration became effective. The
predecessor limited partnership was not registered under the Investment
Company Act of 1940, as amended ("1940 Act"), and, therefore was not sub-
ject to certain investment restrictions that are imposed by the 1940 Act.
If the limited partnership had been registered under the 1940 Act, the lim-
ited partnership's performance may have been lower.
5
<PAGE>
TCW Galileo Emerging Markets Income Fund
- --------------------------------------------------------------------------------
Management Discussions (Continued)
For the fiscal year ended October 31, 1999, the TCW Galileo Emerging Markets
Income Fund (the "Fund") rose 33.31%, versus the J.P. Morgan Emerging Markets
Bond Index Plus ("EMBI+") which rose 19.98%. The positive variance in excess
returns is attributable to overweighted positions in Colombia, Bulgaria and
Mexico, the partial recovery in Russian eurobond prices, positions in a number
of non-index countries (most notably Algeria, Turkey and Vietnam), and corpo-
rate positions in the Philippines.
Emerging market debt valuations have rebounded sharply over the last four con-
secutive quarters. Worst case outcomes widely predicted for the emerging mar-
kets last year have not materialized, largely due to accommodative global li-
quidity conditions, aggressive intervention and interim lending from official
creditors, and the acceleration of orthodox economic reforms.
As crisis conditions have stabilized, cyclical economic recovery has taken
hold. Systemic default risks have diminished even while new, more localized de-
fault risks may be developing. Although global credit fundamentals are stable
to improving, the near-term outlook for emerging markets may be constrained by
uncertainty over U.S. interest rate policy and Y2K concerns.
As these uncertainties subside, credit fundamentals should become the more dom-
inant factor in determining emerging market valuations. Macroeconomic stability
and structural reforms should give rise to improving credit fundamentals,
stronger debt service capacity, and lower default risks. Risks to this scenario
include: a hard landing scenario for the U.S. economy; tight conditions in the
capital markets which could give rise to increased financing risks in 2000; and
the evolving paradigm of burden sharing, where the costs of debt restructuring
are more equally shared between official and private sector creditors.
Our investment strategy has been well positioned for the recovery in market
valuations. For the fourth quarter, investment strategy will be implemented
with a slightly more defensive bias until U.S. and Y2K uncertainties subside.
Our investment strategy has the following elements.
. Credit Quality. The average weighted rating of the portfolio on September 30,
1999, was Ba2/Ba3, versus B1 for the EMBI+.
. High Current Income. The current yield on the portfolio exceeds 11.50%, the
yield to maturity is 14%, versus 9.50% and 14.75%, respectively for the
EMBI+.
. U.S. dollar denominated. Over 98% of the portfolio is U.S. dollar denominated
or hedged to U.S. dollars.
. Under-weighted U.S. interest rate duration, moderately over-weighted credit
spread duration.
. Over-weighted positions in countries and companies where credit fundamentals
are on a stable to improving track; medium term financing requirements are
low or manageable; and geopolitical linkages are strong. In these positions,
current market valuations generally overstate normal emerging market risks.
. Over-weighted positions in private sector credits where normal emerging mar-
ket risks are partially mitigated by non-emerging market factors--e.g. compa-
nies with a strong foreign equity partner or a high percentage of export
sales to developed markets.
. Maximum global diversification by country and sector. Portfolio positions
where expected returns have low or negative correlation.
6
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
TCW Galileo Emerging Markets Income Fund
[PERFORMANCE GRAPH APPEARS HERE]
Average Annualized Total Return/(1)/
<TABLE>
<CAPTION>
1-Year 3-Year 5-Year Since Inception
- ------ ------ ------ ---------------
<S> <C> <C> <C>
33.31% 2.97% N/A 3.81%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1996 4-SEP 257,620.00 264,512.50
OCT 257,748.81 266,589.82
NOV 267,053.54 279,884.69
DEC 272,226.37 283,247.98
1997 JAN 281,114.56 291,082.45
FEB 289,677.31 296,147.17
MAR 280,033.95 285,463.79
APR 289,261.07 293,911.57
MAY 301,974.09 305,326.96
JUN 310,954.80 312,350.29
JUL 320,445.14 325,308.83
AUG 321,127.69 323,991.21
SEP 329,974.76 333,891.14
OCT 295,169.02 295,429.01
NOV 303,776.15 309,461.88
DEC 300,592.58 320,167.23
1998 JAN 298,311.08 319,478,73
FEB 311,180.22 328,623.09
MAR 321,984.40 336,809.88
APR 324,286.59 337,621.04
MAY 304,861.82 326,096.62
JUN 287,027.40 316,683.20
JUL 287,489.52 318,868.31
AUG 181,693.37 227,225.56
SEP 193,461.65 249,448.22
OCT 211,364.60 265,587.52
NOV 233,849.56 281,220.00
DEC 229,308.20 274,189.50
1999 JAN 225,056.83 264,008.84
FEB 228,360.66 267,800.01
MAR 243,384.51 288,059.08
APR 267,318.94 307,745.04
MAY 255,075.74 290,200.49
JUN 264,345.19 303,178.26
JUL 262,960,02 296,890.34
AUG 262,260.55 296,465.79
SEP 270,380.13 306,809.48
OCT 281,779.36 318,649.26
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the Fund's registration became effective. The
predecessor limited partnership was not registered under the Investment
Company Act of 1940, as amended ("1940 Act"), and, therefore was not sub-
ject to certain investment restrictions that are imposed by the 1940 Act.
If the limited partnership had been registered under the 1940 Act, the lim-
ited partnership's performance may have been lower.
7
<PAGE>
TCW Galileo European Equities Fund
- --------------------------------------------------------------------------------
Management Discussions (Continued)
For the fiscal year ended October 31, 1999 the TCW Galileo European Equities
Fund (the "Fund") returned 15.16% for its Institutional ("I") Class shares
versus the MSCI Europe Index return of 12.85%. This puts us in the 25.24 per-
centile of the Morningstar European Equity Funds. For the Advisory ("N") Class
shares, the performance for the period March 1, 1999 (Commencement of offering
Advisory Class shares ) through October 31, 1999 was 6.22% versus the benchmark
return of 5.9%. The performance of the Fund's two classes varies because of
timing and differing expenses.
The year was, until these past two or three months, essentially a year that fa-
vored value investors in Europe. The reasons for this are obvious with hind-
sight. Two main factors influenced this shift. First, we saw, particularly in
the first quarter, an exodus of U.S. money as U.S. investors scrambled to re-
duce their position in Europe and bring up their Japanese weightings from large
under-weights to near benchmark. U.S. investors tend to favor "growth" type
stocks, and this sell off affected the performance of these stocks. Second, Eu-
ropean, and especially U.K., investors sought to play the cyclical recovery in
Europe and Asia which prompted a flow of funds into "value stocks", typically a
European favored sector.
As a result of this, TCW's European portfolios suffered relative to their peer
group, sinking to third quartile in the Frank Russell Universe at the end of
the second quarter, although we continued to beat the benchmark. We began to
see a recovery in growth stocks in the third quarter, and our quartile ranking
climbed to the second quartile for the third quarter and back into the first
quartile for the rolling 12 months.
Since the end of the third quarter, we have seen a surge in the performance of
"growth" stocks. To put this into context, the Fund was only 30 basis points
ahead of its index for the six months ended June 30, 1999. However, the Fund
achieved 8.6% ahead of the index year-to-date through November 30, 1999. We be-
lieve this illustrates that "growth" is once again back in favor.
Our conviction for growth remains based on long-term structural changes in Eu-
rope (restructuring, the introduction of a single currency), in the world (the
technological revolution) and more recently on an increasing excitement among
European companies that they might own the technology for the next generation
of internet use through mobile application. This latter point is still in its
early stages and we are still not fully convinced, but should it occur, it
would herald a new step change in European investing.
Throughout this difficult year for us, we maintained our commitment to growth
investing. The fact that we still managed to beat the index is a testimony to
the success of our concentration on portfolio architecture. We hope that this
shift back to growth continues to the end of this quarter. If this occurs, we
are confident that despite a difficult first three quarters, we will end the
year in the first quartile.
8
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
TCW Galileo European Equities Fund - I Class
[PERFORMANCE GRAPH APPEARS HERE]
Average Annualized Total Return
<TABLE>
<CAPTION>
1-Year 3-Year 5-Year Since Inception
- ------ ------ ------ ---------------
<S> <C> <C> <C>
15.16% N/A N/A 15.98%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1997 3-NOV 251,750.00 253,900.00
DEC 254,750.86 263,243.52
1998 JAN 263,751.21 274,273.42
FEB 288,000.49 295,776.46
MAR 307,999.25 316,924.48
APR 318,249.46 323,136.20
MAY 329,248.16 329,760.49
JUN 324,997.57 333,453.81
JUL 330,246.28 340,122.88
AUG 287,997.87 297,437.46
SEP 272,247.27 285,629.19
OCT 291,996.09 308,565.22
NOV 307,247.04 325,064.20
DEC 319,592.23 339,357.27
1999 JAN 326,262.12 337,253.26
FEB 317,283.39 328,774.71
MAR 317,283.39 332,447.12
APR 324,209.68 342,433.84
MAY 310,871.70 326,068.92
JUN 316,772.04 331,654.48
JUL 320,877.41 334,818.47
AUG 324,981.43 338,303.93
SEP 322,417.33 335,783.56
OCT 336,268.37 348,224.34
</TABLE>
(/1/) For the period March 1, 1999 (Commencement of offering of the Advisory
Class shares) through October 31, 1999.
TCW Galileo European Equities Fund - N class
Total Return/(1)/
Since Inception
6.22%
[PERFORMANCE GRAPH APPEARS HERE]
VALUE: $2,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1997 1-MAR 2,000.00 2,022.34
APR 2,042.04 2,083.09
MAY 1,957.97 1,983.54
JUN 1,995.15 2,017.52
JUL 2,021.03 2,036.77
AUG 2,045.28 2,057.97
SEP 2,029.10 2,042.64
OCT 2,124.49 2,118.32
</TABLE>
9
<PAGE>
TCW Galileo International Equities Fund
- --------------------------------------------------------------------------------
Management Discussions (Continued)
For the fiscal year ended October 31, 1999, TCW Galileo International Equities
Fund, (the "Fund") was up 27.39% versus the MSCI EAFE index, which was up
23.37%. The Fund added value both from stock selection and asset allocation
versus the index.
Two themes dominated the year in international markets. First, we saw the re-
surgence of the Japanese market. We had moved from a very underweight position
at the start of the year to a near neutral position in Japan by the end of
March. We did this for two reasons. On a pure valuation basis, we saw many Jap-
anese companies selling at book value or lower. Second, we started to see some
indications of reform in corporate Japan. Our move into Japan was ahead of the
market. We saw international investors begin to move into Japan by mid June,
with panic- buying building up in the summer.
We remain to be convinced on the reforms in corporate Japan. However, we do see
some companies exhibiting global advantages in niche areas. These represent
"new Japan". Our style in Japan is tilted towards investing in these companies,
which will become leaders regardless of whether "old Japan" companies reform or
not.
The second theme was the collapse of the Euro Currency from 118 at launch ver-
sus the U.S. dollar to near parity recently. Part of this collapse was due to
an overpricing at the time of the launch of the Euro. More recently, investors
were worried about the seeming U-turn of the German government on reform. It
seems to us that at these levels the Euro is undervalued. However, we have been
underweight in Europe since the start of the year, while other investors moved
into an underweight position in the summer.
The weakness in the currency has hidden the very strong returns from Europe in
local currency terms. Our strong belief is that Europe continues to tread the
path of restructuring and that growth, as a style will continue to outperform.
As an indication of the depth of reconstruction taking place in Europe, M&A ac-
tivity in Europe in 1999 has exceeded that in the USA for the first time ever.
For the next fiscal year, we are likely to build up our positions in Europe
again.
Finally, in 1999, there was a strong recovery of emerging markets, especially
Asia. We held an overweight position there for most of the year, while holding
only 1% in Latin America. Our view is that emerging markets will continue to
attract international investors in 2000.
10
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
TCW Galileo International Equities Fund
[PERFORMANCE GRAPH APPEARS HERE]
Average Annualized Total Return/(1)/
<TABLE>
<CAPTION>
1-Year 3-Year 5-Year Since Inception
- ------ ------ ------ ---------------
<S> <C> <C> <C>
27.39% 11.79% 7.54% 9.50%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1993 1-DEC 267,967.50 268,108.50
1994 JAN 291,275.31 290,833.64
FEB 285,979.93 290,087.95
MAR 280,360.42 277,655.36
APR 288,384.34 289,497.91
MAY 286,348.34 287,897.57
JUN 281,509.06 292,030.63
JUL 289,520.80 294,904.21
AUG 301,828.33 301,950.94
SEP 292,233.21 292,506.82
OCT 297,373.59 302,315.46
NOV 281,526.56 287,852.68
DEC 277,886.42 289,723.15
1995 JAN 269,313.62 278,660.94
FEB 267,350.32 277,933.64
MAR 273,916.45 295,346.18
APR 284,177.36 306,533.30
MAY 280,593.88 302,957.90
JUN 275,851.85 297,725.51
JUL 292,819.49 316,342.29
AUG 287,621.95 304,351.65
SEP 287,688.10 310,374.77
OCT 276,502.79 302,111.04
NOV 282,289.99 310,596.13
DEC 291,464.41 323,190.80
1996 JAN 298,672.33 324,593.45
FEB 302,283.28 325,771.73
MAR 307,143.99 332,772.56
APR 321,435.40 342,529.45
MAY 321,721.48 336,309.12
JUN 317,835.08 338,283.25
JUL 304,994.55 328,479.80
AUG 304,887.80 329,284.58
SEP 311,290.44 338,115.99
OCT 306,182.17 334,741.59
NOV 312,563.00 348,144.65
DEC 306,464.90 343,751.06
1997 JAN 297,568.22 331,798.84
FEB 300,790.89 337,306.70
MAR 299,843.40 338,612.08
APR 299,483.58 340,491.37
MAY 321,441.72 362,732.27
JUN 337,057.36 382,816.75
JUL 340,444.78 389,087.29
AUG 317,570.30 360,108.07
SEP 332,635.83 380,362.35
OCT 312,142.14 351,226.59
NOV 305,275.01 347,714.33
DEC 304,026.44 350,843.76
1998 JAN 315,576.40 366,982.57
FEB 340,547.96 390,616.25
MAR 355,841.97 402,725.35
APR 364,581.45 405,987.43
MAY 368,639.24 404,119.88
JUN 363,644.18 407,272.02
JUL 368,637.02 411,507.65
AUG 322,752.77 360,604.15
SEP 309,642.55 349,641.79
OCT 335,550.34 386,179.35
NOV 354,277.41 406,059.87
DEC 367,414.01 422,176.38
1999 JAN 373,667.40 421,023.84
FEB 367,102.06 411,087.68
MAR 381,485.12 428,345.14
APR 393,994.02 445,800.20
MAY 379,609.30 422,939.57
JUN 395,556.68 439,527.26
JUL 407,439.21 452,691.10
AUG 413,693.40 454,447.54
SEP 414,632.48 459,123.81
OCT 427,452.92 476,419.00
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the Fund's registration became effective. The
predecessor limited partnership was not registered under the Investment
Company Act of 1940, as amended ("1940 Act"), and, therefore was not sub-
ject to certain investment restrictions that are imposed by the 1940 Act.
If the limited partnership had been registered under the 1940 Act, the lim-
ited partnership's performance may have been lower.
11
<PAGE>
TCW Galileo Japanese Equities Fund
- --------------------------------------------------------------------------------
Management Discussions (Continued)
After many disappointing years for the Japanese stock market, the last twelve
months, has proved to be a profitable period for Japanese equity investors.
This is all the more remarkable, given the very bearish consensus that was
prevalent one year ago. MSCI Japan returned 69.66% (in U.S. $) for the fiscal
year ended October 31, 1999. We are pleased to report that the TCW Galileo Jap-
anese Equities Fund (the "Fund") beat this benchmark by a wide margin, re-
turning 81.26% (in U.S. $) for the same period.
A significant part of this market return has come from the extraordinary upward
thrust in the yen on the foreign exchange markets. Since the end of June, the
dollar has fallen from 122 to 104 and the move versus the Euro Currency has
been equally dramatic. The cause of this upward move is not difficult to under-
stand. Japan has a huge structural current account surplus that needs to be re-
cycled. As long as domestic and foreign investors had a terminal aversion to
Japanese assets, the recycling process could continue without trouble. However,
as soon as there was a hint of recovery, domestics would favour domestic equi-
ties over foreign bonds and foreigners would prefer to have a smaller under
weighting in Japan. The upward pressure on the yen that would result from these
shifts would justify the change of view and encourage further flows in the same
direction.
The economic news flow has been much better in 1999, following two years of
wretched disappointments. Economic commentators have been revising up their
forecasts all year and the Q1 and Q2 GDP announcements were both surprisingly
strong. Exports have been rising, particularly to Asia, and domestic demand has
received a boost from public works, housing and personal consumption. Capital
spending has, however, remained depressed as companies have adjusted to the
weak demand conditions of 1998 and to previous over investment in plant and ma-
chinery. GDP forecasts for 1999 are now clustered around 1%, having been around
0% to minus 2% in January. Further improvement in the year 2000 is now the gen-
eral expectation.
In the third quarter, the yen's strength has been exercising the minds of the
gloomsters. The Bank of Japan is being encouraged to launch an all out monetary
relaxation in order to boost demand and stop the yen from holding back the eco-
nomic recovery. These arguments seem to miss the point. Japan's problems are
not centered on a lack of liquidity--indeed broad money supply is at a 45 year
high relative to money GDP. The problems are: low returns on equity in the cor-
porate sector (caused by over investment, excess supply and bloated balance
sheets); a banking system under acute pressure and a general lack of confi-
dence.
All of these problems have been and continue to be addressed by Mr. Obuchi's
administration. Companies are buying back shares, they are reducing employee
numbers and closing factories. The banks are being refinanced and reorganized.
Most importantly, the government is pursuing policies which are encouraging ac-
tion, adjustment and economic recovery. There is a good chance that growth can
be sustained.
The Fund has benefited from its exposure to new growth areas of the economy
such as telecommunications, technology and services. We continue to believe
such areas will provide superior shareholder returns, going forward. Neverthe-
less, we are currently able to find strong value in many cyclical areas of the
economy and believe many such stocks are strongly oversold. We continue to be
mindful of benchmark risk and will keep our tracking error relatively low. Cur-
rently, it is 7.5% versus MSCI Japan.
12
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Going forward, we remain positive on Japanese equities over the medium term. We
expect the economy to continue to recover, and think there will be further
meaningful progress in corporate restructuring. There are many new and exciting
companies emerging in Japan, with dynamic growth and a strong orientation to-
wards shareholder returns. As we approach the new millennium, Japan, more than
most industrialized economies, will be glad to see the back of this decade. We
think the next one will be a much more prosperous one for them.
TCW Galileo Japanese Equities Fund
[PERFORMANCE GRAPH APPEARS HERE]
Average Annualized Total Return/(1)/
<TABLE>
<CAPTION>
1-Year 3-Year 5-Year Since Inception
- ------ ------ ------ ---------------
<S> <C> <C> <C>
81.26% 1.10% N/A -0.92%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1995 2-MAY 227,015.00 233,725.00
JUN 220,881.05 222,576.32
JUL 233,729.71 239,759,21
AUG 231,013.77 230,456.55
SEP 223,686.01 230,456.55
OCT 212,881.98 218,380.63
NOV 229,344.14 231,396.11
DEC 244,024.46 242,549.41
1996 JAN 247,438.36 239,299.24
FEB 243,526.36 235,590.11
MAR 250,863.81 243,482.37
APR 277,490.49 259,747.00
MAY 267,345.44 247,201.22
JUN 267,992.42 248,585.54
JUL 256,163.23 236,504.29
AUG 242,730.03 226,287.30
SEP 247,880.76 232,804.38
OCT 232,070.93 217,462.57
NOV 226,733.30 219,311.00
DEC 207,091.39 202,577.57
1997 JAN 188,053.48 180,739.71
FEB 188,978.70 183,993.02
MAR 180,187.41 177,498.07
APR 178,167.51 181,687.02
MAY 204,787.52 204,452.41
JUN 213,130.56 217,925.82
JUL 193,288.11 209,099.83
AUG 175,816.80 190,510.85
SEP 158,555.10 184,928.88
OCT 155,439.50 170,522.92
NOV 131,812.69 157,972.44
DEC 113,316.73 145,429.42
1998 JAN 136,859.42 161,266.69
FEB 140,625.79 163,266.40
MAR 131,994.18 152,180.61
APR 134,661.78 149,684.85
MAY 130,895.29 142,874.19
JUN 130,266.99 144,545.81
JUL 131,679.09 141,597.08
AUG 117,710.57 128,032.08
SEP 116,298.04 124,575.21
OCT 132,306.47 145,441.56
NOV 142,978.31 151,603.92
DEC 148,784.66 156,837.29
1999 JAN 150,040.40 157,764.19
FEB 152,552.08 153,269.49
MAR 179,076.31 174,688.90
APR 188,022.96 183,538.64
MAY 183,000.87 174,767.33
JUN 203,090.70 191,490.82
JUL 222,709.26 211,605.01
AUG 231,027.46 217,866.41
SEP 238,718.36 232,707.47
OCT 239,816.46 246,763.00
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the Fund's registration became effective. The
predecessor limited partnership was not registered under the Investment
Company Act of 1940, as amended ("1940 Act"), and, therefore was not sub-
ject to certain investment restrictions that are imposed by the 1940 Act.
If the limited partnership had been registered under the 1940 Act, the lim-
ited partnership's performance may have been lower.
13
<PAGE>
TCW Galileo Latin America Equities Fund
- --------------------------------------------------------------------------------
Management Discussions (Continued)
TCW Galileo Latin American Equities Fund (the "Fund") total return for the fis-
cal year ended October 31, 1999, was 9.34%. This compares with a 23.39% return
of the International Finance Corporation ("IFC") Latin America Investable Index
for the same period.
Most of the Latin American equity markets posted gains during the Fund's fiscal
year, as stock prices rallied toward the end of 1998 on the back of declining
global interest rate cuts. However, the region's markets began 1999 on a turbu-
lent note, as the Brazilian central bank widened the trading band of the real,
and ultimately allowed the currency to float freely in mid-January. As a re-
sult, the Brazilian currency devalued over 40% versus the U.S. dollar in the
month of January. The Fund's performance was adversely impacted by its defen-
sive position following the Brazilian currency devaluation. Despite sharp stock
market declines throughout the region immediately following the devaluation,
most of the region's markets rebounded quickly due to proactive efforts by Bra-
zilian authorities to restore investor confidence. The region's markets were
also encouraged by a rebound in oil prices, given that several countries in the
region rely heavily on oil exports for government revenues. In general, the im-
proving global growth outlook has been a positive growth factor for Latin Amer-
ica. We look for regional economic growth to accelerate in the fourth quarter
of 1999 and the early part of 2000. Nevertheless, investors' enthusiasm has
been tempered by rising U.S. interest rates and the effect that the millennium
computer bug (Y2K) might have on the region's economies.
The Fund maintained an overweight position in Mexico given the prospects for
moderate economic growth this year and next, which is expected to translate
into strong corporate earnings growth. Although the Fund was underweight in
Brazilian stocks at the height of the financial crisis, the Fund shifted to an
overweight allocation based on expectations of a rebound in economic growth to-
ward the end of 1999. The Fund maintained a neutral position in Peru, where the
economy has begun to show signs of recovery, as well as in Argentina, where the
economic recession and political concerns have largely been discounted by eq-
uity prices. The Fund has an underweight position in Chile, where valuations
remain uncompelling, and in Colombia, where the country's deep recession con-
tinues unabated. The Fund liquidated its Venezuelan securities during the fis-
cal year, due to increased political risk.
The outlook for Latin American equities remains constructive into the year
2000. Mexico's growth prospects remain favorable in both 1999 and 2000, while
most of the region's other economies are showing signs of an incipient economic
recovery taking place this year and next. The IMF recently issued an updated
report forecasting a pick-up in Latin America's regional economic growth rate
from 0.1% in 1999 to 3.9% in 2000. Closure to the Y2K issue will likely remove
a key impediment to portfolio investment flows into the region at a time when
valuation levels are attractive.
14
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
TCW Galileo Latin America Equities Fund
[PERFORMANCE GRAPH APPEARS HERE]
Average Annualized Total Return/(1)/
<TABLE>
<CAPTION>
1-Year 3-Year 5-Year Since Inception
- ------ ------ ------ ---------------
<S> <C> <C> <C>
9.34% -1.12% -6.22% 6.31%
</TABLE>
INITIAL VALUE: $250,000
<TABLE>
<CAPTION>
YEAR MONTH FUND INDEX
- ---- ----- ---- -----
<S> <C> <C> <C>
1991 1-JUL 257,000.00 273,535.47
AUG 274,990.00 299,097.53
SEP 265,365.35 294,672.26
OCT 286,461.90 331,301.46
NOV 289,326.51 318,476.88
DEC 294,534.39 364,114.95
1992 JAN 336,358.28 424,540.85
FEB 391,521.03 448,210.89
MAR 411,488.60 449,366.69
APR 395,440.55 454,583.60
MAY 404,140.24 456,586.45
JUN 340,286.08 368,160.23
JUL 348,861.29 370,645.98
AUG 328,976.20 350,395.82
SEP 312,856.37 335,433.82
OCT 345,706.28 350,308.74
NOV 355,386.06 347,830.91
DEC 376,709.22 376,678.28
1993 JAN 371,209.27 365,650.73
FEB 352,648.80 362,127.93
MAR 383,681.90 392,962.32
APR 369,577.75 378,443.64
MAY 364,640.19 383,510.13
JUN 382,624.25 404,686.51
JUL 396,023.75 416,276.12
AUG 428,466.02 452,739.08
SEP 425,646.71 460,117.16
OCT 458,089.50 491,220.71
NOV 486,655.96 528,736.54
DEC 578,346.81 605,509.82
1994 JAN 643,030.90 686,827.11
FEB 596,723.53 655,588.98
MAR 532,420.60 611,629.20
APR 497,206.30 566,759.02
MAY 511,366.74 596,398.04
JUN 465,435.78 550,633.31
JUL 501,795.62 603,316.97
AUG 572,990.38 702,889.49
SEP 601,313.30 734,111.78
OCT 573,755.11 691,228.63
NOV 569,543.75 679,164.03
DEC 450,007.91 548,139.65
1995 JAN 391,830.88 461,550.03
FEB 338,788.74 394,632.68
MAR 319,111.89 382,845.16
APR 355,471.50 443,001.90
MAY 353,761.68 444,173.53
JUN 357,182.55 453,459.47
JUL 372,580.69 477,754.91
AUG 378,143.32 484,499.68
SEP 373,439.22 478,316.97
OCT 338,791.53 432,726.41
NOV 355,473.62 447,712.16
DEC 361,282.06 456,356.87
1996 JAN 403,432.84 499,255.86
FEB 380,638.89 472,886.32
MAR 388,811.20 480,470.23
APR 406,875.37 505,755.22
MAY 425,367.86 518,991.45
JUN 435,691.53 528,237.81
JUL 417,196.43 504,939.84
AUG 432,248.88 518,635.21
SEP 439,990.45 528,681.13
OCT 430,526.26 518,809.37
NOV 434,396.69 521,152.63
DEC 449,448.54 534,895.50
1997 JAN 493,265.27 584,190.94
FEB 524,498.83 622,387.59
MAR 520,161.22 615,745.73
APR 543,589.29 640,848.64
MAY 584,369.35 692,621.91
JUN 633,824.53 748,274.22
JUL 671,651.18 789,779.92
AUG 606,051.01 721,128.88
SEP 665,134.92 782,006.02
OCT 543,488.40 636,312.54
NOV 573,467.22 655,913.55
DEC 600,402.97 691,481.95
1998 JAN 533,061.78 611,431.29
FEB 558,259.61 641,774.86
MAR 593,016.85 683,755.54
APR 587,804.23 677,881.57
MAY 512,212.61 593,342.31
JUN 487,882.51 560,394.24
JUL 508,178.42 582,583.91
AUG 324,273.73 385,877.14
SEP 349,148.77 412,017.10
OCT 380,687.38 443,492.72
NOV 402,009.68 484,396.05
DEC 368,695.14 445,755.78
1999 JAN 314,946.76 394,632.05
FEB 334,048.28 417,414.16
MAR 391,350.92 505,569.68
APR 453,986.64 579,814.67
MAY 427,333.08 560,100.98
JUN 454,430.27 583,496.39
JUL 415,340.18 543,042.59
AUG 402,456.33 527,250.91
SEP 408,674.28 537,368.85
OCT 416,226.58 547,191.96
</TABLE>
(1) Performance data includes the performance of the predecessor limited part-
nership for periods before the Fund's registration became effective. The
predecessor limited partnership was not registered under the Investment
Company Act of 1940, as amended ("1940 Act"), and, therefore was not sub-
ject to certain investment restrictions that are imposed by the 1940 Act.
If the limited partnership had been registered under the 1940 Act, the lim-
ited partnership's performance may have been lower.
15
<PAGE>
TCW Galileo Asia Pacific Equities Fund
- --------------------------------------------------------------------------------
Schedule of Investments
<TABLE>
<CAPTION>
Number of
Shares or
Warrants Common Stock Value
- --------- ------------ ----------
<S> <C> <C>
Hong Kong (33.7% of Net Assets)
160,000 Cheung Kong Holdings, Limited $1,451,924
248,000 China Telecom (Hong Kong), Limited 849,118*
190,000 Cosco Pacific, Limited 140,623
400,000 Giordano International, Limited 424,765
140,024 HSBC Holdings, PLC 1,680,685
818,000 Huaneng Power International, Incorporated 244,800
126,700 Hutchison Whampoa, Limited 1,272,056
120,000 Legend Holdings, Limited 128,202
71,000 Sun Hung Kai Properties, Limited 573,465
234,000 Wharf Holdings, Limited 676,187
----------
Total Hong Kong (Cost: $6,475,420) 7,441,825
----------
India (5.7%)
2,450 Infosys Technologies, Limited (ADR) 369,950*
24,815 Reliance Industries, Limited (GDR) 305,845
10,000 Satyam Infoway, Limited (ADR) 387,500
12,335 Videsh Sanchar Nigam, Limited (GDR) 197,052
----------
Total India (Cost: $720,181) 1,260,347
----------
Philippines (1.8%)
56,871 Jollibee Foods Corporation, Warrants, expire 03/25/03 21,574*
33,880 Manila Electric Company 92,706
5,653 Metropolitan Bank & Trust 42,186
4,638 Philippine Long Distance Telephone Company 96,337
43,298 San Miguel Corporation, Class B 62,470
507,413 SM Prime Holdings 89,618
----------
Total Philippines (Cost: $530,678) 404,891
----------
Singapore (11.0%)
84,550 City Developments, Limited 437,187
94,081 Natsteel Electronics, Limited 367,681
109,507 Oversea-Chinese Banking Corporation, Limited 823,011
25,340 Singapore Press Holdings, Limited 434,217
96,844 Singapore Technologies Engineering, Limited 140,328
114,190 Singapore Telecommunications, Limited 216,956
----------
Total Singapore (Cost: $2,105,758) 2,419,380
----------
South Korea (20.4%)
2,241 Cheil Jedang Corporation 128,858
13,367 Housing & Commercial Bank, Korea 353,112*
24,840 Korea Electric Power Corporation 726,570
8,869 Korea Telecom Corporation 596,440*
10,052 Korea Telecom Corporation (ADR) 354,333
9,283 L.G. Chemical, Limited 280,811
18,423 Mirae Company 98,870*
9,869 Samsung Electronics Company, Limited 1,644,833
2,644 Pohang Iron & Steel Company, Limited 323,626
----------
Total South Korea (Cost: $3,110,061) 4,507,453
----------
</TABLE>
16
See accompanying notes to financial statements.
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Value
--------- -----------
<C> <S> <C>
Taiwan (22.7%)
34,387 Accton Technology Corporation (GDR) $ 123,105
22,378 Advanced Semiconducter Engineering, Incorporated
(GDR) 452,595*
212 Asustek Computer, Incorporated (144A) (GDR) 2,995**
51,643 Asustek Computer, Incorporated (GDR) 729,457*
40,520 China Steel Corporation (GDR) 681,749
9,216 Formosa Growth Fund, Limited 201,277*
77,158 Siliconware Precision Industries Company (GDR) 831,377*
11,873 Synnex Technology International Corporation (GDR) 234,796*
238,221 Taiwan Semiconductor Manufacturing Company,
Limited (Local Shares) 1,055,600**
6,590 Winbond Electronics Corporation (144A) (GDR) 120,103* **
31,000 Winbond Electronics Corporation (GDR) 564,975*
-----------
Total Taiwan (Cost: $4,010,023) 4,998,029
-----------
Thailand (2.6%)
21,031 Advanced Info Service Public Company, Limited
(Foreign) 244,990*
139,246 Bangkok Bank Public Company, Limited (Foreign) 324,415*
-----------
Total Thailand (Cost: $568,735) 569,405
-----------
Total Common Stock (Cost: $17,520,856) (97.9%) 21,601,330
-----------
<CAPTION>
Principal
Amount Short-Term Investments
--------- ----------------------
<C> <S> <C>
$106,359 Bank of Montreal, 5.19%, due 11/01/99 106,359***
713,037 BankBoston Corp., 5.5%, due 11/01/99 713,037***
513,694 Investors Bank and Trust Depository Reserve, 4.3%,
due 11/01/99 513,694
800,000 Merrimac Money Market Fund 800,000***
-----------
Total Short-Term Investments (Cost: $2,133,090)
(9.6%) 2,133,090
-----------
Total Investments (Cost: $19,653,946) (107.5%) 23,734,420
Liabilities in Excess of Other Assets (-7.5%) (1,664,519)
-----------
Net Assets (100.0%) $22,069,901
===========
</TABLE>
Notes to the Schedule of Investments:
* Non-income producing.
** Restricted security (Note 9).
*** Represents investments of security lending collateral (Note 3).
17
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Asia Pacific Equities Fund
- --------------------------------------------------------------------------------
Investments by Industry October 31, 1999
<TABLE>
<CAPTION>
Percentage of
Industry Net Assets
- ------------------------------------ -------------
<S> <C>
Aerospace/Defense 0.6%
Banking 14.6
Beverages, Food, Tobacco 0.9
Chemicals 2.6
Commercial Services 0.6
Communications 10.0
Computer Software & Services 9.5
Electric Utilities 4.8
Electrical Equipment 1.7
Electronics 21.2
Industrial--Diversified 8.9
Investment Companies 0.9
Media--Broadcasting & Publishing 2.0
Metals 4.5
Radio Telephone Communications 1.1
Real Estate 11.6
Restaurants 0.1
Retailers 1.9
Telephone Communications, exc. Radio 0.4
Short-Term Investments 9.6
------
Total 107.5%
======
</TABLE>
18
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Emerging Markets Equities Fund
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Schedule of Investments October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Common Stock Value
- --------- ------------ ---------
<S> <C> <C>
Argentina (3.1% of Net Assets)
5,636 Banco de Galicia y Buenos Aires, S.A. (ADR) $ 119,061
3,972 Banco Frances, S.A. (ADR) 86,888
20,448 CEI Citicorp Holdings, S.A. 65,873*
34,607 Perez Companc, S.A., Series B 209,815*
48,978 Siderca, S.A. 93,591
3,765 Telecom Argentina STET--France Telecom, S.A., Series B (ADR) 103,538
5,013 Telefonica de Argentina, Sociedad Anonima, Series B (ADR) 128,458
3,384 Transportadora de Gas del Sur, S.A. (ADR) 28,341
---------
Total Argentina (Cost: $803,970) 835,565
---------
Brazil (Cost: $92,166) (0.3%)
16,273 Souza Cruz, S.A. 92,905
---------
Chile (2.7%)
4,898 Banco Santander Chile (ADR) 80,205
570 Banco Santiago, S.A. (ADR) 11,400
2,935 Chilectra, S.A. (ADR) 50,996
2,793 Compania Cervecerias Unidas, S.A. (ADR) 60,748
8,841 Compania de Telecomunicaciones de Chile, S.A., Series A (ADR) 147,534
4,120 Distribucion y Servicio D&S, S.A. (ADR) 67,208
2,677 Laboratorio Chile, S.A. (ADR) 46,513
2,241 Sociedad Quimica Y Minera de Chile, S.A. (ADR) 65,129
5,266 Vina Concha y Toro, S.A. (ADR) 181,677
---------
Total Chile (Cost: $760,077) 711,410
---------
Greece (6.2%)
6,164 Alpha Credit Bank, S.A. 470,849
7,400 Hellenic Petroleum, S.A. 111,993*
14,765 Hellenic Telecommunication Organization, S.A. 312,509
4,928 Intracom, S.A. 218,803
4,164 National Bank of Greece, S.A. 298,195
8,610 Panafon, S.A. 113,726*
1,025 Titan Cement Company, S.A. 113,530
---------
Total Greece (Cost: $1,464,187) 1,639,605
---------
Hong Kong (2.5%)
147,996 Cosco Pacific, Limited 109,535
651,917 Huaneng Power International, Incorporated 195,097
182,275 Legend Holdings, Limited 194,733
648,127 Yizheng Chemical Fibre Company 177,278*
---------
Total Hong Kong (Cost: $708,648) 676,643
---------
Hungary (2.2%)
54,504 Magyar Tavkozlesi Rt. 317,027
3,691 Mol Magyar Olaj-es Gazipari Rt. (144A) (GDR) 73,266**
</TABLE>
19
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Emerging Markets Equities Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Number of
Shares Value
--------- ----------
<C> <S> <C>
Hungary (Continued)
1,148 Mol Magyar Olaj-es Gazipari Rt. (GDR) $ 22,788
3,954 OTP Bank Rt. 179,520
----------
Total Hungary (Cost: $557,594) 592,601
----------
India (4.6%)
6,164 Infosys Technologies, Limited (ADR) 930,764*
14,243 Reliance Industries, Limited (GDR) 175,545
7,023 Videsh Sanchar Nigam, Limited (GDR) 112,192
----------
Total India (Cost: $581,140) 1,218,501
----------
Israel (3.5%)
57,513 Bank Hapoalim, Limited 136,610
45,810 Bank Leumi Le-Israel 80,694*
28,970 Bezeq Israeli Telecommunications Corporation, Limited 117,935*
5,239 Blue Square Chain Investments & Properties, Limited 71,831*
3,256 ECI Telecommunications, Limited 94,831
12,264 Elbit Systems 174,495
2,604 NICE-Systems, Limited (ADR) 75,516*
1,900 Partner Communications Company, Limited (GDR) 29,925
3,205 Teva Pharmaceutical Industries, Limited (ADR) 155,042
----------
Total Israel (Cost: $994,440) 936,879
----------
Mexico (12.3%)
18,691 Alfa, S.A. de C.V. 71,694
15,506 Apasco, S.A. de C.V. 82,204
11,120 Cemex, S.A. de C.V. (ADR) 250,200
243,947 Cifra, S.A. de C.V., Series C 372,767*
3,857 Coca Cola Femsa, S.A. (ADR) 53,998
51,388 DESC, S.A. de C.V., Series B 41,666
7,003 Fomento Economico Mexicano, S.A. de C.V., Series B
(ADR) 229,786
13,300 Grupo Carso, S.A. de C.V., Series A1 55,716*
85,885 Grupo Industrial Bimbo, S.A. de C.V., Series A 157,486
17,655 Grupo Mexico, S.A., Series B 63,866
83,163 Grupo Modelo, S.A. de C.V., Series C 203,153
8,569 Grupo Televisa, S.A. de C.V. (GDR) 364,183*
56,273 Kimberly-Clark de Mexico, S.A. de C.V., Series A 180,167
43,449 Organizacion Soriana, S.A., Series B 160,788
11,324 Telefonos de Mexico, S.A. de C.V. (ADR) 968,202
----------
Total Mexico (Cost: $2,909,147) 3,255,876
----------
</TABLE>
20
See accompanying notes to financial statements.
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Value
- --------- ----------
<S> <C> <C>
Peru (0.8%)
33,008 Cementos Lima, S.A., Class I $ 38,195
4,029 Compania de Minas Buenaventura, S.A., Series B (ADR) 68,493
3,800 Credicorp, Limited (ADR) 40,375
5,694 Telefonica del Peru, S.A., Series B (ADR) 65,837
----------
Total Peru (Cost: $224,650) 212,900
----------
Philippines (1.4%)
15,955 Manila Electric Company 43,658
9,244 Metropolitan Bank & Trust 68,988
5,198 Philippine Long Distance Telephone Company 107,968
57,007 San Miguel Corporation, Class B 82,249
399,841 SM Prime Holdings 70,619
----------
Total Philippines (Cost: $472,596) 373,482
----------
Poland (2.1%)
2,279 Bank Rozwoju Eksportu, S.A. 62,076
3,118 Bank Slaski, S.A. 169,858
27,291 Electrim Spolka Akcyjna, S.A. 235,936*
3,709 Telekomunikacja Polska, S.A. 18,800
15,965 Telekomunikacja Polska, S.A. (144A) (GDR) 80,224* **
----------
Total Poland (Cost: $607,720) 566,894
----------
South Africa (11.6%)
10,389 Anglo American Platinum Corporation, Limited 299,137
10,901 Anglo American, PLC 579,878
4,875 Anglogold, Limited 275,186
9,888 De Beers Centenary, AG 269,913
938 Edgars Consolidated Stores, Limited 9,155
42,476 Johnnies Industrial Corporation, Limited 290,212
24,832 Liberty Life Association of Africa, Limited 230,255
18,851 Nedcor Investment Bank Holdings 10,580*
16,709 Nedcor, Limited 328,352
29,444 Rembrandt Group, Limited 220,092
212,338 Sanlam, Limited (Foreign) 243,523*
24,064 South African Breweries, PLC 210,607
29,122 Standard Bank Investment Corporation 99,487
----------
Total South Africa (Cost: $2,736,557) 3,066,377
----------
South Korea (14.7%)
1,226 Cheil Jedang Corporation 70,495
4,773 Kookmin Bank 74,379
18,204 Korea Electric Power Corporation 532,467
6,415 Korea Telecom Corporation 431,409*
12,035 Korea Telecom Corporation (ADR) 424,234
5,252 L.G. Chemical, Limited 158,873
7,662 Pohang Iron & Steel Company, Limited 937,829
7,721 Samsung Electronics Company, Limited 1,286,833
----------
Total South Korea (Cost: $2,721,963) 3,916,519
----------
</TABLE>
21
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Emerging Markets Equities Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Number of
Shares Value
---------- -----------
<C> <S> <C>
Taiwan (14.4%)
45,785 Acer, Incorporated (GDR) $ 439,536*
17,329 ASE Test, Limited 433,225*
196 Asustek Computer, Incorporated (144A) (GDR) 2,769**
11,012 Asustek Computer, Incorporated (GDR) 155,545*
1,191 China Steel Corporation (GDR) 20,039
12,322 Formosa Growth Fund, Limited 269,112*
2,108 Synnex Technology International Corporation (GDR) 41,678*
17,641 Taiwan Semiconductor Manufacturing Company, Limited
(ADR) 610,820
362,200 Taiwan Semiconductor Manufacturing Company, Limited
(Local Shares) 1,604,972**
3,780 Winbond Electronics Corporation (144A) (GDR) 68,891* **
10,335 Winbond Electronics Corporation (GDR) 188,355*
-----------
Total Taiwan (Cost: $2,730,822) 3,834,942
-----------
Thailand (Cost: $250,269) (0.8%)
91,207 Bangkok Bank Public Company, Limited (Foreign) 212,494*
-----------
Turkey (5.2%)
19,970,946 Akbank, T.A.S. 311,514
8,917,868 Akcansa Cimento 120,557
7,225,953 Arcelik, A.S. 266,754
571,119 Migros Turk, T.A.S. 246,469
11,170,465 Turkiye Is Bankasi, A.S., Series C 220,705
13,839,477 Yapi Ve Kredi Bankasi, A.S. 201,481
-----------
Total Turkey (Cost: $1,041,028) 1,367,480
-----------
Total Common Stock (Cost: $19,656,974) (88.4%) 23,511,073
-----------
Preferred Stock
---------------
Brazil (8.9%)
2,323 Aracruz Celulose, S.A. (ADR) 47,622
20,160,740 Banco Bradesco, S.A. 98,584
1,833,959 Banco Itau, S.A. 105,173
4,452,473 Centrais Eletricas Brasileiras, S.A. (ELETROBRAS) 79,109
14,243 Companhia Cervejaria Brahma (ADR) 178,038
3,617 Companhia Energetica de Minas Gerais, S.A. (CEMIG) (ADR) 50,638
9,849 Companhia Vale do Rio Doce 195,618
11,474 Embratel Participacoes, S.A. (ADR) 147,728
6,587 Gerdau, S.A. (ADR) 119,389
2,083,285 Petroleo Brasileiro, S.A. (PETROBRAS) 331,214
2,815 Tele Centro Sul Participacoes, S.A. (ADR) 168,196
4,507 Telecomunicacoes Brasileiras, S.A. (ADR) 350,983*
14,452 Tele Norte Leste Participacoes, S.A. (TELEMAR) (ADR) 243,878
10,224 Telesp Participacoes, S.A. (ADR) 165,501
3,150,027 Votorantim Celulose e Papel, S.A. 91,936
-----------
Total Preferred Stock (Cost: $2,289,758) (8.9%) 2,373,607
-----------
</TABLE>
22
See accompanying notes to financial statements.
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
Number of
Rights Value
--------- -----------
<S> <C> <C>
Rights (Cost: $0) (0.0%)
479 Kookmin Bank, Rights, expire 11/03/99 $ 2,914*
-----------
Total Equity Securities (Cost: $21,947,232) (97.3%) 25,887,594
-----------
<CAPTION>
Principal
Amount Short-Term Investments (Cost: $844,728) (3.2%)
--------- ----------------------------------------------
<S> <C> <C>
$844,728 Investors Bank and Trust Depository Reserve, 4.3%, due 11/01/99 844,728
-----------
Total Investments (Cost: $22,791,460) (100.5%) 26,732,322
Liabilities in Excess of Other Assets (-0.5%) (141,756)
-----------
Net Assets (100.0%) $26,590,566
===========
</TABLE>
Notes to the Schedule of Investments:
* Non-income producing.
** Restricted security (Note 9).
23
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Emerging Markets Equities Fund
- --------------------------------------------------------------------------------
Investments by Industry October 31, 1999
<TABLE>
<CAPTION>
Percentage of
Industry Net Assets
- ------------------------------------------- -------------
<S> <C>
Aerospace/Defense 0.7%
Banking 13.1
Beverages, Food & Tobacco 5.7
Building Materials 2.3
Chemicals 2.2
Commercial Services 0.4
Communications 5.1
Computer Software & Services 3.1
Cosmetics & Personal Care 0.7
Electric Utilities 3.6
Electronics 15.8
Food Retailers 1.2
Home Construction, Furnishings & Appliances 1.0
Industrial--Diversified 6.7
Insurance 1.8
Investment Companies 1.3
Media--Broadcasting & Publishing 1.4
Metals 4.7
Mining 3.0
Oil & Gas 2.9
Paper & Forest Products 0.5
Pharmaceuticals 0.8
Prepacked Software 3.5
Radio Telephone Communications 0.4
Real Estate 0.2
Retail 2.2
Telegraph & Other Communications 2.7
Telephone Communications, exc. Radio 10.3
Short-Term Investments 3.2
------
Total 100.5%
======
</TABLE>
24
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Emerging Markets Income Fund
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Schedule of Investments October 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Fixed Income Securities Value
------------- ----------------------- -----------
<C> <S> <C>
Algeria (Cost: $2,451,807) (3.5% of Net Assets)
$ 4,143,000 The People's Democratic Republic of Algeria,
U.B.A.F. as Agent, Rescheduling Deed dated June
27, 1996, Tranche 3, Variable Rate based on Six
Month LIBOR +0.8125%, due 2000-2010 $ 2,817,240
-----------
Argentina (Cost: $7,043,917) (9.2%)
7,625,000 Republic of Argentina, 11.75%, due 04/07/09 7,483,938
-----------
Brazil (15.6%)
1,850,000 BNDES Participacoes, S.A., 13.64%, due 06/16/08 1,600,250
5,345,000 Republic of Brazil, 11.625%, due 04/15/04 5,104,475
5,766,703 Republic of Brazil, 14.5%, due 10/15/09 5,939,704
-----------
Total Brazil (Cost: $12,456,329) 12,644,429
-----------
Bulgaria (5.7%)
4,063,000 Republic of Bulgaria Discount Bonds, Series A,
Variable Rate based on Six Month LIBOR +0.8125%,
due 07/28/24 3,011,699
2,445,000 Republic of Bulgaria Front Loaded Interest
Reduction Bonds, Series A, 2.75%, due 07/28/12 1,647,319
-----------
Total Bulgaria (Cost: $4,230,550) 4,659,018
-----------
China (1.6%)
580,000 AES China Generating Company, 10.125%, due
12/15/06 348,000
1,000,000 Huaneng Power International, Incorporated, 1.75%,
due 05/21/04 962,500
-----------
Total China (Cost: $1,416,343) 1,310,500
-----------
Colombia (2.2%)
1,010,000 Republic of Colombia, 8.625%, due 04/01/08 862,288
1,020,000 Republic of Colombia, 9.75%, due 04/23/09 928,200
-----------
Total Colombia (Cost: $1,749,556) 1,790,488
-----------
Croatia (Cost: $1,404,596) (1.8%)
1,777,000 Croatia Government National, Series A, Variable
Rate based on Six Month LIBOR +0.8125%, due
07/31/10 1,448,255
-----------
Dominican Republic (Cost: $719,318) (0.9%)
845,000 Tricom S.A., 11.375%, due 09/01/04 747,825
-----------
El Salvador (Cost: $923,559) (1.2%)
1,000,000 Republic of El Salvador, (144A), 9.5%, due
08/15/06 995,000*
-----------
Hungary (Cost: $1,384,823) (1.7%)
EUR 1,300,000 Pannon Finance B.V. (144A), 7.75%, due 08/03/04 1,349,350*
-----------
</TABLE>
25
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Emerging Markets Income Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Principal
Amount Value
-------------- -----------
<C> <S> <C>
India (Cost: $955,934) (1.2%)
$ 1,000,000 Reliance Industries, Limited, 9.375%, due
06/24/26 $ 963,750
-----------
Indonesia (Cost: $796,668) (1.0%)
1,070,000 Asia Pulp & Paper Global Finance Company,
Variable Rate based on Six Month LIBOR + 4%,
due 10/04/01 797,150
-----------
Malaysia (Cost: $1,003,740) (1.3%)
1,010,000 Republic of Malaysia, 8.75%, due 06/01/09 1,035,957
-----------
Mexico (17.7%)
1,500,000 Grupo Iusacell, S. A. de C.V., 10%, due 07/15/04 1,410,000
1,245,000 Grupo Minero Mexico, Series A, 8.25%, due
04/01/08 996,000
11,200,000 United Mexico States Global Bond, 11.375%, due
09/15/16 11,972,800
-----------
Total Mexico (Cost: $13,920,866) 14,378,800
-----------
Morocco (Cost: $1,790,920) (2.4%)
2,253,900 The Kingdom of Morocco, Restructuring and
Consolidating Agreement dated September 20,
1990, Tranche A, Variable Rate based on Six
Month LIBOR +0.8125% due 01/01/09 1,960,893
-----------
Panama (Cost: $1,849,933) (2.3%)
2,000,000 Republic of Panama, 9.375%, due 04/01/29 1,890,000
-----------
Peru (Cost: $1,368,933) (1.7%)
2,520,000 Republic of Peru Front Loaded Interest Reduction
Bonds, 3.75%, due 03/07/17 1,386,000
-----------
Philippines (2.8%)
1,130,000 Ce Casecnan Water & Energy, Series A, 11.45%,
due 11/15/05 1,050,900*
1,260,000 Republic of Philippines, 9.875%, due 01/15/19 1,222,200
-----------
Total Philippines (Cost: $2,223,547) 2,273,100
-----------
Poland (Cost: $891,497) (1.1%)
1,005,000 Netia Holdings B.V., 10.25%, due 11/01/07 851,738
-----------
Russia (7.6%)
RUB 17,039,252 Russia OFZ--Federal Loan Bond, Series 5023, 14%,
due 09/12/01 32,630
820,000 Russian Federation (144A), 12.75%, due 06/24/28,
Par Put 06/24/08 448,950*
10,320,000 Russian Federation (Reg. S), 12.75%, due
06/24/28, Par Put 06/24/08 5,650,200*
-----------
Total Russia (Cost: $5,794,803) 6,131,780
-----------
</TABLE>
26
See accompanying notes to financial statements.
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
- -------------- -----------
<S> <C> <C>
South Korea (Cost: $1,442,018) (1.9%)
$ 1,455,000 Republic of Korea, 8.875%, due 04/15/08 $ 1,513,200
-----------
Trinidad & Tobago (Cost: $976,854) (1.2%)
1,000,000 Trinidad & Tobago, (144A), 9.875%, due 10/01/09 1,005,000*
-----------
Tunisia (Cost: $1,009,534) (1.3%)
1,230,000 Banque Cent de Tunisie, 8.25%, due 09/19/27 1,014,750
-----------
Turkey (4.6%)
2,285,000 Republic of Turkey, 12.375%, due 06/15/09 2,286,143
TRL 10,211,337 Turkish Treasury Bill Linked Deposit, 0%, due 06/07/00 1,435,474
-----------
Total Turkey (Cost: $3,532,443) 3,721,617
-----------
Venezuela (5.2%)
210,000 PDVSA Finance, Limited, (144A), 9.75%, due 02/15/10 199,143*
1,245,000 PDVSA Finance, Limited, (Reg. S), 9.75%, due 02/15/10 1,180,634*
3,140,000 Republic of Venezuela, 13.625%, due 08/15/18 2,857,400
-----------
Total Venezuela (Cost: $4,002,555) 4,237,177
-----------
Total Fixed Income Securities (Cost: $75,341,043) (96.7%) 78,406,955
-----------
Short-Term Investments
----------------------
71,952 Foreign Currency Call Accounts 71,952
1,582,439 Investors Bank and Trust Depository Reserve,
4.3%, due 11/01/99 1,582,439
-----------
Total Short-Term Investments (Cost: $1,654,391) (2.0%) 1,654,391
-----------
Total Investments (Cost: $76,995,434) (98.7%) 80,061,346
Excess of Other Assets Over Liabilities (1.3%) 1,051,782
-----------
Net Assets (100.0%) $81,113,128
===========
</TABLE>
Notes to the Schedule of Investments:
EUR - Euro Currency.
RUB - Russian Ruble.
TRL - Turkish Lira. (in 000's)
* Restricted security (Note 9).
27
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Emerging Markets Income Fund
- --------------------------------------------------------------------------------
Investments by Industry October 31, 1999
<TABLE>
<CAPTION>
Percentage of
Industry Net Assets
- ------------------------------------ -------------
<S> <C>
Banking 2.0%
Chemicals 1.2
Electric Utilities 2.9
Government 81.3
Metals 1.2
Oil & Gas 1.7
Paper & Forest Products 1.0
Radio Telephone Communications 3.4
Telephone Communications, exc. Radio 2.0
Short-Term Investments 2.0
-----
Total 98.7%
=====
</TABLE>
28
See accompanying notes to financial statements.
<PAGE>
TCW Galileo European Equities Fund
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Schedule of Investments October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Common Stock Value
--------- ------------ -----------
<C> <S> <C>
Finland (4.2% of Net Assets)
23,000 Nokia OYJ $ 2,630,514
45,279 Sonera OYJ 1,358,773
-----------
Total Finland (Cost: $1,909,297) 3,989,287
-----------
France (18.6%)
8,126 Accor, S.A. 1,827,825
43,430 Alstom 1,314,699
16,993 Axa, S.A. 2,395,206
10,091 Cap Gemini, S.A. 1,527,358
46,530 Credit Lyonnais, S.A. 1,406,096*
15,200 Galaries Lafayette 2,236,741
35,000 Lagardere Groupe 1,416,357
9,100 PSA Peugeot Citreon, S.A. 1,745,614
29,210 Total Fina, S.A. 3,943,532
-----------
Total France (Cost: $16,029,693) 17,813,428
-----------
Germany (13.6%)
31,080 Bayerische Hypo-Und Vereinsbank AG 2,028,694
48,178 Bayerische Motoren Werke AG 1,544,517
29,000 Deutsche Bank AG 2,074,293
26,176 Fresenius Medical Care AG 1,829,654
15,605 Mannesmann AG 2,453,801
8,000 Muenchener Rueckversicherungs Gesellschaft AG 1,833,118
3,406 SAP AG 1,267,337
-----------
Total Germany (Cost: $11,971,117) 13,031,414
-----------
Great Britain (23.4%)
390,864 BP Amoco, PLC 3,787,744
85,982 British Telecommunications, PLC 1,557,094
580,000 Centrica, PLC 1,682,374
138,000 Computacenter, PLC 1,434,699
94,500 Future Network, PLC 1,104,973
143,244 HSBC Holdings, PLC 1,761,908
60,500 Orange, PLC 1,506,177*
87,400 Pearson, PLC 1,960,717
83,500 PizzaExpress, PLC 1,103,106
60,000 Prudential, PLC 939,858
191,115 SmithKline Beecham, PLC 2,458,928
657,235 Vodafone Group, PLC 3,052,405
-----------
Total Great Britain (Cost: $17,536,680) 22,349,983
-----------
Ireland (4.2%)
62,200 CRH, PLC 1,173,543
152,000 Eircom, PLC 633,477*
53,424 Elan Corporation, PLC (ADR) 1,375,668*
104,713 Ryanair Holdings, PLC 858,498*
-----------
Total Ireland (Cost: $4,514,180) 4,041,186
-----------
Italy (2.5%)
153,400 Eni, S.p.A. 901,486
230,000 Telecom Italia Mobile, S.p.A. (T.I.M.) 1,439,639
-----------
Total Italy (Cost: $2,349,452) 2,341,125
-----------
</TABLE>
29
See accompanying notes to financial statements.
<PAGE>
TCW Galileo European Equities Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Number of
Shares Value
---------- -----------
<C> <S> <C>
Netherlands (18.2%)
24,000 ASM Lithography Holding, N.V. $ 1,692,691*
23,000 Equant, N.V. 2,236,215*
43,099 Fortis (NL), N.V. 1,408,872
35,400 Getronics, N.V. 1,763,704
35,410 International Nederlanden Groep 2,087,267
21,082 Koninklijke (Royal) Philips Electronics, N.V. 2,160,531
105,935 Libertel, N.V. 2,004,269*
27,000 ST Microelectronics, N.V. 2,369,705
21,500 United Pan-Europe Communications, N.V. 1,651,961*
-----------
Total Netherlands (Cost: $14,267,618) 17,375,215
-----------
Portugal (Cost: $1,903,753) (1.5%)
11,117 Telecel Comunicacoes Pessoais 1,441,939*
-----------
Spain (4.7%)
68,772 Grupo Ferrovial, S.A. 1,225,252*
30,000 Sogecable, S.A. 824,903*
149,861 Telefonica, S.A. 2,463,596*
-----------
Total Spain (Cost: $4,008,791) 4,513,751
-----------
Switzerland (6.3%)
3,700 Adecco, S.A. 2,241,395
1,630 Roche Holding AG 1,955,615
3,258 Zurich Allied AG 1,843,345
-----------
Total Switzerland (Cost: $5,473,960) 6,040,355
-----------
Total Common Stock (Cost: $79,964,541) (97.2%) 92,937,683
-----------
Preferred Stock
Germany (Cost: $1,051,879) (1.2%)
420 Porsche AG 1,143,387
-----------
Total Equity Securities (Cost: $81,016,420) (98.4%) 94,081,070
-----------
Principal
Amount Short-Term Investments
----------
$ 143,840 Bank of Montreal, 5.19%, due 11/01/99 143,840**
76,095 BankBoston Corp., 5.5%, due 11/01/99 76,095**
608,169 Foreign Currency Call Accounts 608,169
895,891 Investors Bank and Trust Depository Reserve, 4.3%,
due 11/01/99 895,891
300,000 Janus Money Market Fund 300,000**
170,011 Merrimac Money Market Fund 170,011**
1,500,000 Royal Bank of Scotland, 5.25%, due 11/01/99 1,500,000**
-----------
Total Short-Term Investments (Cost: $3,694,006)
(3.8%) 3,694,006
-----------
Total Investments (Cost: $84,710,426) (102.2%) 97,775,076
Liabilities in Excess of Other Assets (-2.2%) (2,137,104)
-----------
Net Assets (100.0%) $95,637,972
===========
</TABLE>
Notes to the Schedule of Investments:
* Non-income producing.
** Represents investments of security lending collateral. (Note 3).
30
See accompanying notes to financial statements.
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Investments by Industry October 31, 1999
<TABLE>
<CAPTION>
Percentage of
Industry Net Assets
- ------------------------------------------- -------------
<S> <C>
Airlines 0.9%
Automotive 4.6
Banking 9.8
Building Materials 1.2
Commercial Services 2.3
Communications 3.4
Computer Software & Services 10.3
Electronics 4.7
Heavy Machinery 3.9
Home Construction, Furnishings & Appliances 1.3
Industrial--Diversified 1.5
Insurance 8.8
Lodging 1.9
Media--Broadcasting & Publishing 4.1
Medical Supplies 1.9
Oil & Gas 10.8
Pharmaceuticals 6.0
Radio Telephone Communications 8.7
Restaurants 1.2
Retailers 2.3
Telegraph & Other Communications 1.7
Telephone Communications, exc. Radio 7.1
Short-Term Investments 3.8
------
Total 102.2%
======
</TABLE>
31
See accompanying notes to financial statements.
<PAGE>
TCW Galileo International Equities Fund
- --------------------------------------------------------------------------------
Schedule of Investments October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Common Stock Value
--------- ------------ ------------
<C> <S> <C>
Australia (1.5% of Net Assets)
36,000 AMP, Limited $ 366,535
420,000 Goodman Fielder, Limited 388,847
85,000 Telstra Corporation 432,932
125,000 Western Mining Corporation Holding, Limited 537,138
------------
Total Common Stock (Cost: $1,769,807) (1.5%) 1,725,452
------------
TCW Galileo Funds
-----------------
464,825 TCW Galileo Asia Pacific Equities Fund 3,890,582
5,807,867 TCW Galileo European Equities Fund 76,141,142
1,837,406 TCW Galileo Japanese Equities Fund 28,075,559
115,229 TCW Galileo Latin America Equities Fund 1,079,695
1,134,622 TCW Galileo Money Market Fund 1,134,622
------------
Total TCW Galileo Funds (Cost: $88,615,211) (98.2%) 110,321,600
------------
<CAPTION>
Principal
Amount Short-Term Investments
--------- ----------------------
<C> <S> <C>
$ 17,406 Foreign Currency Call Accounts 17,406
322,397 Investors Bank and Trust Depository Reserve, 4.3%,
due 11/01/99 322,397
------------
Total Short-Term Investments (Cost: $339,808) (0.3%) 339,803
------------
Total Investments (Cost: $90,724,821) (100.0%) 112,386,855
Liabilities in Excess of Other Assets (0.0%) (51,095)
------------
Net Assets (100.0%) $112,335,760
============
</TABLE>
32
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Japanese Equities Fund
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Schedule of Investments October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares or
Warrants Common Stock Value
--------- ------------ ----------
<C> <S> <C>
Japan (87.9% of Net Assets)
5,000 Advantest Corporation $ 752,564
250 Aloka Company, Limited, Warrants 1997, expire 09/25/01 190,127*
150,000 Amada Sonoike Company, Limited 350,877
76,000 Amano Corporation 582,878
50,000 Asahi Organic Chemicals Industry Company, Limited 183,587
11,000 Bodysonic Company, Limited 326,910*
49,000 Canon Chemicals, Incorporated 445,796
52,000 Canon, Incorporated 1,470,616
75,000 Catena Corporation 704,630
30,000 Chubu Electric Power Company, Incorporated 511,648
160,000 Citizen Watch Company, Limited 1,130,476
85,000 Daiwa House Industry Company, Limited 777,394
20,000 Fuji Machine Manufacturing Company, Limited 929,920
142,000 Fujikura, Limited 878,056
25,000 Fujitsu, Limited 752,564
200 Goodwill Group, Incorporated 1,437,830
94,000 Hachijuni Bank, Limited 685,783
155,000 Higo Bank, Limited 704,343
151,000 Hitachi Cable, Limited 665,900
56,000 Hitachi Maxell, Limited 1,342,153
22,000 Honda Motor Company, Limited 928,003
72,000 INES Corporation 1,158,930
10,000 Internet Initiative Japan, Incorporated (ADR) 537,500
20,000 ISB Corporation 605,886*
87,000 Kansei Corporation 275,237
74,000 Kawasumi Laboratories, Incorporated 1,120,890
130,000 Kinseki, Limited 859,937
37,000 Kissel Pharmaceutical Company 709,424
25,000 Kyocera Corporation 2,396,702
30,000 Kyowa Exeo Corporation 287,317
65,000 Matsushita Electric Industrial Company, Limited 1,367,798
118,000 Minebea Company, Limited 1,589,397
150,000 Mitsubishi Corporation 1,078,516
55,000 Mitsubishi Estate Company, Limited 551,002
269,000 Mitsui Marine and Fire Insurance Company, Limited 1,781,986
200 Mobilephone Telecommunications International, Limited 889,656
12,000 Murata Manufacturing Company, Limited 1,541,559
50,000 NEC Corporation 1,011,408
105,000 Nichicon Corporation 2,274,950
38,800 Nichiei Company, Limited 2,008,628*
73,000 Nippon Densetsu Kogyo Company, Limited 248,442
400,000 Nippon Sanso Corporation 1,253,955
2,900 Nippon Telegraph & Telephone Corporation 4,448,279
130,000 Nippon Thompson Company, Limited 842,489
1,250 NTT Mobile Communcation Network, Incorporated 3,319,432
</TABLE>
33
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Japanese Equities Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Number of
Shares Value
--------------- -----------
<C> <S> <C>
Japan (Continued)
500 OBIC Business Consultants, Limited $ 172,083*
35,000 Ono Pharmaceutical Company, Limited 1,140,830
117,100 Osaka Steel Company, Limited 673,569
20,000 Promise Company, Limited 1,342,153
100,000 Riken Vinyl Industry Company, Limited 407,439
19,700 Riso Kagaku Corporation 849,871
6,000 Rohm Company 1,345,988
102,000 Sagami Company, Limited 279,666
14,400 Sanyo Shinpan Finance Company, Limited 688,870
26,000 Satori Electric Company, Limited 301,601
86,000 Seino Transportation Company, Limited 596,913
219,000 Sekisui Chemical Company, Limited 1,077,049
146,000 Senko Company, Limited 440,897
24,000 Shimano, Incorporated 598,217
40 Shin Nippon Air Technologies Company, Limited 181
75,000 Shionogi & Company, Limited 689,531
51,000 Showa Corporation 222,462
2,800 Softbank Corporation 1,162,305
81,000 Sumitomo Bakelite Company, Limited 799,051
38,000 Takada Kiko Company, Limited 201,457
15,500 Tokyo Cathode Laboratory Company 160,483
50,000 Tokyo Ohka Kogyo Company, Limited 1,145,624
232,000 Toppan Printing Company, Limited 2,844,675
177,000 Toshiba Plant Kensetsu Company 493,788
48,000 Ushio, Incorporated 600,058
133,000 Yamaha Motor Company, Limited 1,081,239
105,000 Yodogawa Steel Works, Limited 432,844
-----------
Total Common Stock (Cost: $59,204,922) (87.9%) 67,660,219
-----------
<CAPTION>
Principal
Amount Convertible Securities
--------------- ----------------------
<C> <S> <C>
Japan (11.1%)
JPY 18,000,000 Bank of Fukuoka,1.1%, due 09/28/07 254,530*
JPY 100,000,000 Daiwa Securities Company, Limited
0.5%, due 09/29/06 1,092,896
$ 1,150,000 MBL International Finance (Bermuda
Trust, Exchangeable Mitsubishi Bank,
3%, due 11/30/02 1,450,495
</TABLE>
34
See accompanying notes to financial statements.
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Convertible Securities Value
-------------- ---------------------- -----------
<C> <S> <C>
Japan (Continued)
JPY 50,000,000 Mimasu Semiconductor Industry Company, Limited,
0.8%, due 05/31/06 $ 560,828*
JPY 99,000,000 Sanwa International Finance (Bermuda) Trust,
1.25%, due 08/01/05 1,226,704*
JPY 90,000,000 Sumitomo Bank International Finance N.V.C.,
0.75%, due 01/31/01 1,173,425*
$ 2,500,000 UBS A.G. Jersey, Exchangeable Sony Corp., 1%,
due 05/05/03 2,787,500*
-----------
Total Convertible Securities (Cost: $7,394,123)
(11.1%) 8,546,378
-----------
Short-Term Investments
----------------------
195,521 Bank of Montreal, 5.19%, due 11/01/99 195,521**
1,832,737 BankBoston Corp., 5.5%, due 11/01/99 1,832,737**
364,561 Foreign Currency Call Accounts 364,561
1,714 Investors Bank and Trust Depository Reserve,
4.3%, due 11/01/99 1,714
948,492 Merrimac Money Market Fund 948,492**
-----------
Total Short-Term Investments (Cost: $3,343,025)
(4.3%) 3,343,025
-----------
Total Investments (Cost: $69,942,070) (103.3%) 79,549,622
Liabilities in Excess of Other Assets (-3.3%) (2,574,338)
-----------
Net Assets (100.0%) $76,975,284
===========
</TABLE>
Notes to the Schedule of Investments:
JPY - Japanese Yen.
* Non-income producing.
** Represents investments of security lending collateral (Note 3).
35
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Japanese Equities Fund
- --------------------------------------------------------------------------------
Investments by Industry October 31, 1999
<TABLE>
<CAPTION>
Percentage of
Industry Net Assets
- -------- -------------
<S> <C>
Apparel Retailers 0.4%
Automotive 3.2
Banking 10.7
Chemicals 4.8
Commercial Services 4.7
Communications 0.9
Computers & Information 4.8
Electric Utilities 0.7
Electrical Equipment 10.5
Electronics 12.6
Entertainment & Leisure 0.8
Financial Services 6.7
Heavy Construction 0.3
Heavy Machinery 4.1
Home Construction, Furnishings & Appliances 2.7
Information Retrieval Services 0.7
Insurance 2.3
Medical Supplies 1.7
Metals 2.6
Miscellaneous 1.4
Pharmaceuticals 3.3
Prepackaged Software 2.5
Radio Telephone Communications 4.3
Real Estate 0.7
Retailers 1.5
Social Services 1.9
Telephone Communications, exc. Radio 6.9
Transportation 1.3
Short-Term Investments 4.3
------
Total 103.3%
======
</TABLE>
36
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Latin America Equities Fund
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Schedule of Investments October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Common Stock Value
----------- ------------ ------------
<C> <S> <C>
Argentina (9.9% of Net Assets)
4,779 Banco de Galicia y Buenos Aires, S.A. (ADR) $ 100,952
3,810 Banco Frances, S.A. (ADR) 83,340
20,060 CEI Citicorp Holdings, S.A. 64,619*
10,000 IRSA Inversiones y Representaciones, S.A. 30,211
8,580 Juan Minetti, S.A. 23,260*
26,766 Perez Compano, S.A., Series B 162,273*
41,400 Siderca, S.A. 79,106
4,090 Telecom Argentina STET--France Telecom, S.A., Series B
(ADR) 112,471
3,940 Telefonica de Argentina, Sociedad Anonima, Series B (ADR) 100,959
3,005 Transportadora de Gas del Sur, S.A. (ADR) 25,164
------------
Total Argentina (Cost: $750,128) 782,355
------------
Brazil (1.3%)
380 Companhia Vale Do Rio Doce (ADR) 7,692
143,700,000 Companhia de Eletricidade do Estado do Rio de Janeiro 28,692*
12,350 Souza Cruz, S.A. 70,504
------------
Total Brazil (Cost: $125,180) 106,888
------------
Chile (5.3%)
1,310 Banco Santander Chile (ADR) 21,448
2,970 Banco Santiago, S.A. (ADR) 59,396
970 Chilectra, S.A. (ADR) 16,851
1,960 Compania Cervecerias Unidas, S.A. (ADR) 42,627
4,213 Compania De Telecomunicaciones de Chile, S.A., Series A
(ADR) 70,300
2,770 Distribucion y Servicio D&S, S.A. (ADR) 45,183
2,340 Laboratorio Chile, S.A. (ADR) 40,655
1605 Gener, S.A. (ADR) 23,871
1,100 Sociedad Quimica y Minera de Chile, S.A. (ADR) 31,966
2,050 Vina Concha y Toro, S.A. (ADR) 70,721
------------
Total Chile (Cost: $474,593) 423,018
------------
Colombia (Cost: $102,226) (0.8%)
19,859 Bavaria CB 65,907
------------
Mexico (45.5%)
21,300 Alfa, S.A. de C.V. 81,698
15,000 Apasco, S.A. de C.V. 79,518
10,429 Cemex, S.A. de C.V. (ADR) 234,649
270,072 Cifra, S.A. de C.V. Series C 412,684*
2,900 Coca Cola Femas, S.A. (ADR) 40,597
47,200 DESC, S.A. de C.V. Series B 38,267
7,510 Fomento Economico Mexicano, S.A. de C.V. Series B (ADR) 246,418
</TABLE>
37
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Latin America Equities Fund
- --------------------------------------------------------------------------------
Schedule of Investments (Continued)
<TABLE>
<CAPTION>
Number of
Shares Value
---------- ------------
<C> <S> <C>
Mexico (Continued)
23,524 Grupo Carso, S.A. de C.V. Series A $ 98,542*
116,532 Grupo Industrial Bimbo, S.A. de C.V., Series A 213,678
22,000 Grupo Mexico, S.A., Series B 79,580
92,550 Grupo Modelo, S.A. de C.V., Series C 226,080
10,000 Grupo Televisa, S.A. de C.V. (GDR) 424,996*
58,050 Kimberly-Clark de Mexico, S.A. de C.V., Series A 185,853
49,500 Organizacion Soriana, S.A., Series B 183,177
12,482 Telefonos de Mexico, S.A. de C.V. (ADR) 1,067,207
------------
Total Mexico (Cost: $3,600,325) 3,612,944
------------
Peru (2.4%)
22,236 Cementos Lima, S.A., Class T 25,727
3,178 Compania de Minas Buenaventura, S.A., Series B
(ADR) 54,023
2,300 Credicorp, Limited (ADR) 24,435
7,245 Telefonica del Peru, S.A., Series B (ADR) 83,766
------------
Total Peru (Cost: $197,628) 187,951
------------
Total Commmon Stock (Cost: $5,250,080) (65.2%) 5,179,063
------------
Preferred Stock
---------------
Brazil (32.8%)
2,470 Aracrus Celulose, S.A. (ADR) 50,632
24,030,000 Banco Bradesco, S.A. 117,501
696,000 Banco do Estado de Sao Paulo, S.A. 17,851
2,000,000 Banco Itau, S.A. 114,691
5,910,000 Centrais Electricas Brasileiras, S.A. (ELETROBRAS) 105,002
13,625 Companhia Cervajaris Brahma (ADR) 170,309
4,582 Companhia Energetica de Minas Gerais, S.A. (CEMIG)
(ADR) 64,144
3,495 Companhia Paranaenae de Energia (COPEL) (ADR) 23,151
10,678 Companhia Vale do Rio Doce 212,080
11,912 Embratel Participacoes, S.A. (ADR) 153,363
6,820 Gerdau, S.A. (ADR) 123,609
44,360 Itausa-Investimentos Itau, S.A. 26,799
2,345,800 Petroleo Brasileiro, S.A. (PETROBRAS) 372,946
2,022 Tele Centro Sul Participacoes, S.A. (ADR) 120,811
1,770 Telecomunicacoes Brasileiras, S.A. (ADR) 137,835*
Tele Norte Leste Participacoes, S.A. (TELEMAR)
14,913 (ADR) 251,653
3,850 Telesp Celular Participacoes, S.A. (ADR) 94,802
16,035 Telesp Participacoes, S.A. (ADR) 259,563
2,030 Tele Sedeste Celular Participacoes, S.A. (ADR) 40,597
2,160 Uniao de Bancos Brasileiras, S.A. (GDR) 50,082
</TABLE>
38
See accompanying notes to financial statements.
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
Number of
Shares Value
--------- ------------
<C> <S> <C>
Brazil (Continued)
11,000 Usinas Siderurgicas de Minas Gerais, S.A. (USIMINAS) $ 39,987
1,950,000 Votorantim Celulose e Papel, S.A. 56,908
------------
Total Preferred Stock (Cost: $2,796,044) (32.8%) 2,604,316
------------
Total Equity Security (Cost: $8,046,124) (98.0%) 7,783,379
------------
<CAPTION>
Principal
Amount Short-Term Investments (Cost: $458,978) (5.8%)
--------- ----------------------------------------------
<C> <S> <C>
$458,978 Investors Bank and Trust Depository Reserve, 4.3%,
due 11/01/99 458,978
------------
Total Investments (Cost: $8,505,102) (103.8%) 8,242,357
Liabilities in Excess of Other Assets (-3.8%) (303,674)
------------
Net Assets (100.0%) $ 7,938,683
============
</TABLE>
Notes to the Schedule of Investments:
* Non-income producing.
Investments by Industry
<TABLE>
<CAPTION>
Percentage of
Industry Net Assets
- -------- -------------
<S> <C>
Banking 7.4%
Beverages, Food & Tobacco 14.4
Building Materials 4.6
Chemicals 0.4
Cosmetics & Personal Care 2.3
Electric Utilities 3.3
Industrial--Diversified 3.1
Investment Companies 0.8
Media--Broadcasting & Publishing 5.4
Metals 3.7
Mining 3.8
Oil & Gas 7.1
Paper & Forest Products 1.3
Pharmaceuticals 0.5
Radio Telephone Communications 1.7
Real Estate 0.4
Retailers 8.1
Telegraph & Other Communications 9.9
Telephone Communications, exc. Radio 19.8
Short-Term Investments 5.8
------
Total 103.8%
======
</TABLE>
39
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Funds, Inc.
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
International
Statements of Assets and Liabilities October 31, 1999
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo
TCW Galileo Emerging Emerging
Asia Pacific Markets Markets
Equities Fund Equities Fund Income Fund
------------- ------------- -----------
Dollar Amounts in Thousands
(Except per Share Amounts)
<S> <C> <C> <C>
ASSETS
Investments, at Value (/1/) $ 23,734 $ 26,732 $ 80,061
Receivables for Securities Sold 53 -- 2,876
Interest and Dividends Receivable 2 27 1,842
Unrealized Appreciation of Forward
Foreign Curency Contract (Note 10) -- -- 37
Other Assets 14 -- --
--------- --------- ----------
Total Assets 23,803 26,759 84,816
--------- --------- ----------
LIABILITIES
Payables for Securities Purchased -- 80 2,868
Distribution Payable -- -- 724
Payable Upon Return of Securities
Loaned (Note 3) 1,619 -- --
Accrued Management Fees 52 25 51
Other Accrued Expenses 62 63 60
--------- --------- ----------
Total Liabilities 1,733 168 3,703
--------- --------- ----------
NET ASSETS $ 22,070 $ 26,591 $ 81,113
========= ========= ==========
NET ASSETS CONSIST OF:
Paid-in Capital $ 20,935 $ 33,988 $ 82,516
Undistributed Net Realized (Loss) on
Investments and Foreign Currency (2,703) (11,731) (4,585)
Unrealized Appreciation on Investments
and Foreign Currency 4,080 3,934 3,099
Undistributed Net Investment Income
(Loss) (242) 400 83
--------- --------- ----------
NET ASSETS $ 22,070 $ 26,591 $ 81,113
========= ========= ==========
NET ASSETS ATTRIBUTABLE TO:
Institutional Class Shares $ 22,070 $ 26,591 $ 81,113
========= ========= ==========
Advisory Class Shares -- -- --
========= ========= ==========
CAPITAL SHARES OUTSTANDING:
Institutional Class 2,635,846 3,376,781 10,347,888
========= ========= ==========
Advisory Class -- -- --
========= ========= ==========
NET ASSET VALUE PER SHARE:
Institutional Class $ 8.37 $ 7.87 $ 7.84
========= ========= ==========
Advisory Class $ -- $ -- $ --
========= ========= ==========
</TABLE>
(1) The identified cost for the TCW Galileo Asia Pacific Equities Fund, the TCW
Galileo Emerging Markets Equities Fund and the TCW Galileo Emerging Markets
Income Fund at October 31, 1999, was $19,654, $22,791 and $76,995,
respectively.
40
See accompanying notes to financial statements.
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities October 31, 1999
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo TCW Galileo
European International Japanese Latin America
Equities Fund Equities Fund Equities Fund Equities Fund
------------- ------------- ------------- -------------
Dollar Amounts in Thousands
(Except per Share Amounts)
<S> <C> <C> <C> <C>
ASSETS
Investments, at Value (1) $ 97,775 $ 112,387 $ 79,550 $ 8,242
Receivables for Securities Sold -- -- 1,284 78
Interest and Dividends Receivable 33 7 218 25
Foreign Tax Reclaim Receivable 150 -- 12 --
Deferred Organization Costs 4 5 3 --
---------- ---------- ---------- --------
Total Assets 97,962 112,399 81,067 8,345
---------- ---------- ---------- --------
LIABILITIES
Payables for Securities Purchased -- -- 898 316
Payable for Fund Shares Purchased -- -- 105 --
Payable Upon Return of Securities
Loaned (Note 3) 2,190 -- 2,977 --
Accrued Management Fees 61 -- 49 36
Other Accrued Expenses 73 63 63 54
---------- ---------- ---------- --------
Total Liabilities 2,324 63 4,092 406
---------- ---------- ---------- --------
NET ASSETS $ 95,638 $ 112,336 $ 76,975 $ 7,939
========== ========== ========== ========
NET ASSETS CONSIST OF:
Paid-in Capital $ 76,952 $ 86,526 $ 56,588 $ 19,881
Undistributed Net Realized Gain
(Loss) on Investments and
Foreign Currency 5,022 2,390 10,979 (12,385)
Unrealized Appreciation
(Depreciation) on Investments
and Foreign Currency 13,065 21,662 9,626 (279)
Undistributed Net Investment
Income (Loss) 599 1,758 (218) 722
---------- ---------- ---------- --------
NET ASSETS $ 95,638 $ 112,336 $ 76,975 $ 7,939
========== ========== ========== ========
NET ASSETS ATTRIBUTABLE TO:
Institutional Class $ 95,489 $ 112,336 $ 76,975 $ 7,939
========== ========== ========== ========
Advisory Class $ 149 $ -- $ -- $ --
========== ========== ========== ========
CAPITAL SHARES OUTSTANDING:
Institutional Class 7,286,043 8,214,754 5,036,725 847,073
========== ========== ========== ========
Advisory Class 11,339 -- -- --
========== ========== ========== ========
NET ASSET VALUE PER SHARE:
Institutional Class $ 13.11 $ 13.67 $ 15.28 $ 9.37
========== ========== ========== ========
Advisory Class $ 13.14 $ -- $ -- $ --
========== ========== ========== ========
</TABLE>
(1) The identified cost for the TCW Galileo European Equities Fund, the TCW
Galileo International Equities Fund, the TCW Galileo Japanese Equities Fund
and the TCW Galileo Latin America Equities Fund at October 31, 1999, was
$84,710, $90,725, $69,942 and $8,505, respectively.
41
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
International
Statements of Operations Year Ended October 31, 1999
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo
TCW Galileo Emerging Emerging
Asia Pacific Markets Markets
Equities Fund Equities Fund Income Fund
------------- ------------- -----------
Dollar Amounts in Thousands
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends (/1/) $ 203 $ 340 $ --
Interest (Note 2) 39 38 7,652
------ ------ -------
Total 242 378 7,652
------ ------ -------
Expenses:
Management Fees 143 212 464
Transfer Agent Fees 37 38 26
Accounting Service Fees 22 23 27
Professional Fees 19 19 25
Administration Fees 9 10 15
Directors' Fees & Expenses 7 7 7
Custodian Fees 39 86 24
Registration Fees -- -- 12
Other 19 34 23
------ ------ -------
Total Expenses 295 429 623
Less Expenses Borne by Investment
Adviser 4 -- --
------ ------ -------
Net Expenses 291 429 623
------ ------ -------
Net Investment Income (Loss) (49) (51) 7,029
------ ------ -------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net Realized Gain (Loss) on:
Investments 2,729 1,352 2,056
Foreign Currency (17) (132) (9)
Change in Unrealized Appreciation
(Depreciation) on:
Investments 3,653 5,889 6,957
Foreign Currency -- (7) 33
------ ------ -------
Net Realized and Unrealized Gain on
Investments and Foreign Currency
Transactions 6,365 7,102 9,037
------ ------ -------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $6,316 $7,051 $16,066
====== ====== =======
</TABLE>
(1) Net of foreign taxes withheld of $18 and $27 for the TCW Galileo Asia Pa-
cific Equities Fund and the TCW Galileo Emerging Markets Equities Fund, re-
spectively.
42
See accompanying notes to financial statements.
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Statements of Operations Year Ended October 31, 1999
<TABLE>
<CAPTION>
TCW Galileo
TCW Galileo TCW Galileo TCW Galileo Latin
European International Japanese America
Equities Fund Equities Fund Equities Fund Equities Fund
------------- ------------- ------------- -------------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends (/1/) $ 1,184 $ 1,679 $ 358 $ 211
Interest (Note 2) 73 42 68 17
------- ------- ------- -------
Total 1,257 1,721 426 228
------- ------- ------- -------
Expenses:
Management Fees 593 -- 371 70
Transfer Agent Fees--
Institutional Class 32 32 23 38
Transfer Agent Fees--
Advisory Class 8 -- -- --
Accounting Service Fees 29 27 26 21
Professional Fees 29 38 23 17
Administration Fees 20 21 14 7
Directors' Fees and
Expenses 7 7 7 7
Custodian Fees 56 7 27 49
Amortization of
Deferred Organization
Costs 1 2 3 --
Registration Fees--
Institutional Class 7 -- -- --
Registration Fees--
Advisory Class 35 -- -- --
Other 28 29 18 18
------- ------- ------- -------
Total Expenses 845 163 512 227
Less Expenses Borne by
Investment Adviser 48 -- -- 73
------- ------- ------- -------
Net Expenses 797 163 512 154
------- ------- ------- -------
Net Investment Income
(Loss) 460 1,558 (86) 74
------- ------- ------- -------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND
FOREIGN CURRENCY
TRANSACTIONS
Net Realized Gain
(Loss) on:
Investments 5,089 3,127 16,191 (1,749)
Foreign Currency (123) 14 296 (150)
------- ------- ------- -------
Change in Unrealized
Appreciation
(Depreciation) on:
Investments 5,763 17,357 10,725 500
Foreign Currency -- -- 18 (16)
------- ------- ------- -------
Net Realized and
Unrealized Gain
(Loss) on Investments
and Foreign Currency
Transactions 10,729 20,498 27,230 (1,415)
------- ------- ------- -------
INCREASE (DECREASE) IN
NET ASSETS RESULTING
FROM OPERATIONS $11,189 $22,056 $27,144 $(1,341)
======= ======= ======= =======
</TABLE>
(1) Net of foreign taxes withheld of $126, $1, $76 and $26 for the TCW Galileo
European Equities Fund, the TCW Galileo International Equities Fund, the
TCW Galileo Japanese Equities Fund and the TCW Galileo Latin America Equi-
ties Fund, respectively.
43
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
International
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
TCW Galileo
TCW Galileo Asia Emerging Markets
Pacific Equities Fund Equities Fund
--------------------- ------------------
Year Ended Year Ended
October 31, October 31,
----------------------- ------------------
1999 1998 1999 1998
---------- ----------- -------- --------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income (Loss) $ (49) $ 40 $ (51) $ 375
Net Realized Gain (Loss) on
Investments and Foreign Currency
Transactions 2,712 (7,018) 1,220 (7,931)
Change in Unrealized Appreciation
(Depreciation) on Investments
and Foreign Currency
Transactions 3,653 3,769 5,882 (3,247)
---------- ----------- -------- --------
Increase (Decrease) in Net Assets
Resulting from Operations 6,316 (3,209) 7,051 (10,803)
---------- ----------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment
Income -- -- -- (34)
Distributions from Net Realized
Gains -- (2,465) -- --
---------- ----------- -------- --------
Total Distributions to
Shareholders -- (2,465) -- (34)
---------- ----------- -------- --------
NET CAPITAL SHARE TRANSACTIONS
(Note 8)
Institutional Class 7,272 (7,171) 777 (18,126)
---------- ----------- -------- --------
Increase (Decrease) in Net Assets 13,588 (12,845) 7,828 (28,963)
NET ASSETS
Beginning of Year 8,482 21,327 18,763 47,726
---------- ----------- -------- --------
End of Year $ 22,070 $ 8,482 $ 26,591 $ 18,763
========== =========== ======== ========
</TABLE>
44
See accompanying notes to financial statements.
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
TCW Galileo Emerging TCW Galileo European
Markets Income Fund Equities Fund
---------------------------- ----------------------------
June 3, 1998 November 3, 1997
(Commencement of (Commencement of
Year Ended Operations) Year Ended Operations)
October 31, through October 31, through
1999 October 31, 1998 1999 October 31, 1998
----------- ---------------- ----------- ----------------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income $ 7,029 $ 1,133 $ 460 $ 284
Net Realized Gain (Loss)
on Investments and
Foreign Currency
Transactions 2,047 (6,632) 4,966 1,708
Change in Unrealized
Appreciation
(Depreciation) on
Investments and Foreign
Currency Transactions 6,990 (3,087) 5,763 3,856
------- ------- ------- -------
Increase (Decrease) in
Net Assets Resulting
from Operations 16,066 (8,586) 11,189 5,848
------- ------- ------- -------
DISTRIBUTIONS TO
SHAREHOLDERS
Distributions from Net
Investment Income-
Institutional Class (6,940) (1,133) (145) --
Distributions in Excess
of Net Investment
Income -- (6) -- --
Distributions from Net
Realized Gains-
Institutional Class -- -- (1,652) --
------- ------- ------- -------
Total Distributions to
Shareholders (6,940) (1,139) (1,797) --
------- ------- ------- -------
NET CAPITAL SHARE
TRANSACTIONS (Note 8)
Institutional Class 41,897 39,815 22,111 58,146
Advisory Class -- -- 141 --
------- ------- ------- -------
Increase in Net Assets
Resulting from Net
Capital Share
Transactions 41,897 39,815 22,252 58,146
------- ------- ------- -------
Increase in Net Assets 51,023 30,090 31,644 63,994
NET ASSETS
Beginning of Period 30,090 -- 63,994 --
------- ------- ------- -------
End of Period $81,113 $30,090 $95,638 $63,994
======= ======= ======= =======
</TABLE>
45
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
International
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
TCW Galileo International TCW Galileo Japanese
Equities Fund Equities Fund
---------------------------- ----------------------------
November 3, 1997 November 3, 1997
(Commencement of (Commencement of
Year Ended Operations) Year Ended Operations)
October 31, through October 31, through
1999 October 31, 1998 1999 October 31, 1998
----------- ---------------- ----------- ----------------
Dollar Amounts in Thousands
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income (Loss) $ 1,558 $ 346 $ (86) $ (74)
Net Realized Gain (Loss) on
Investments and Foreign
Currency Transactions 3,141 (751) 16,487 (5,508)
Change in Unrealized
Appreciation on Investments
and Foreign Currency
Transactions 17,357 4,305 10,743 4,310
-------- ------- ------- -------
Increase (Decrease) in Net
Assets Resulting from
Operations 22,056 3,900 27,144 (1,272)
-------- ------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net
Investment Income (146) -- (6) (52)
-------- ------- ------- -------
NET CAPITAL SHARE
TRANSACTIONS (Note 8)
Institutional Class 15,573 70,953 21,189 29,972
-------- ------- ------- -------
Increase in Net Assets 37,483 74,853 48,327 28,648
NET ASSETS
Beginning of Period 74,853 -- 28,648 --
-------- ------- ------- -------
End of Period $112,336 $74,853 $76,975 $28,648
======== ======= ======= =======
</TABLE>
46
See accompanying notes to financial statements.
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
TCW Galileo
Latin America
Equities Fund
-----------------
Year Ended
October 31,
-----------------
1999 1998
------- --------
Dollar Amounts
in Thousands
<S> <C> <C>
OPERATIONS
Net Investment Income $ 74 $ 351
Net Realized Gain (Loss) on Investments and Foreign
Currency Transactions (1,899) 3,972
Change in Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Transactions 484 (12,359)
------- --------
(Decrease) in Net Assets Resulting from Operations (1,341) (8,036)
------- --------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from Net Investment Income -- (595)
------- --------
NET CAPITAL SHARE TRANSACTIONS (Note 8)
Institutional Class (2,516) (34,909)
------- --------
(Decrease) in Net Assets (3,857) (43,540)
NET ASSETS
Beginning of Year 11,796 55,336
------- --------
End of Year $ 7,939 $ 11,796
======= ========
</TABLE>
47
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
International
Notes to Financial Statements
Note 1 -- Organization
TCW Galileo Funds, Inc., a Maryland corporation (the "Company"), is an open-end
management investment company registered under the Investment Company Act of
1940, as amended, that currently offers a selection of 20 no-load mutual funds
known as the TCW Galileo Funds (the "Funds"). TCW Funds Management, Inc. (the
"Advisor") is the investment advisor to the Funds. On January 3, 2000, the Ad-
visor changed its name to TCW Investment Management Company, Inc. TCW London
International, Limited is a sub-advisor for the TCW Galileo Asia Pacific Equi-
ties Fund, the TCW Galileo Emerging Markets Equities Fund, the TCW Galileo Eu-
ropean Equities Fund, the TCW Galileo International Equities Fund, and the TCW
Galileo Japanese Equities Fund. The advisors are registered under the Invest-
ment Advisors Act of 1940. Each Fund has distinct investment objectives and
policies. For the period November 1, 1998 through February 28, 1999, TCW In-
vestment Management Company, Inc. was also the administrator of the Funds' day-
to-day operations. As of March 1, 1999, Investors Bank & Trust Company became
the administrator of the Funds.
The Funds' financial statements are separated into three reports: 1) U.S. Equi-
ties Funds, 2) U.S. Fixed Income Funds, and 3) International Funds. However,
all Funds are listed below along with their investment objectives, and are cur-
rently offered by the Company.
U.S. Equities
<TABLE>
<CAPTION>
TCW Galileo Fund Investment Objective
---------------- --------------------
<C> <S>
Convertible Securities Fund
TCW Galileo Convertible Securities Seeks high total return from current income and
Fund capital appreciation through investment princi-
pally in convertible securities.
Non-Diversified U.S. Equity Funds
TCW Galileo Aggressive Growth Equities Seeks long-term capital appreciation, primarily
Fund (formerly TCW Galileo Mid-Cap by investing in publicly-traded equity securi-
Growth Fund) ties of medium capitalization companies.
TCW Galileo Earnings Momentum Fund Seeks capital appreciation through investment
primarily in publicly-traded equity securities
of companies experiencing or expected to experi-
ence accelerating earnings growth.
TCW Galileo Large Cap Growth Fund Seeks long-term appreciation by investing pri-
marily in publicly traded equity securities of
large capitalization U.S. companies with above
average earnings prospects.
TCW Galileo Large Cap Value Fund Seeks long-term capital appreciation by invest-
ing primarily in publicly traded equity securi-
ties of large capitalization companies.
TCW Galileo Select Equities Fund Emphasizes capital appreciation and preservation
(formerly TCW Galileo Core Equities with focus on long-term results.
Fund)
TCW Galileo Small Cap Growth Fund Seeks long-term capital appreciation, primarily
by investing in publicly-traded equity securi-
ties of smaller capitalization companies.
TCW Galileo Value Opportunities Fund Seeks capital appreciation by investing at least
65% of its total assets, under normal circum-
stances, in publicly traded equity securities
issued by small and medium companies with market
capitalization at the time of purchase between
$500 million and $5 billion.
</TABLE>
48
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
October 31, 1999
U.S. Fixed Income
<TABLE>
<CAPTION>
TCW Galileo Fund Investment Objective
---------------- --------------------
<C> <S>
Diversified Money Market Fund
TCW Galileo Money Market Fund Seeks current income, preservation of
capital and liquidity by investing in
short-term money market securities.
Diversified Fixed Income Funds
TCW Galileo Core Fixed Income Fund Seeks capital appreciation and income
through investment principally in core
fixed income securities emphasizing
high quality and liquid investments.
TCW Galileo High Yield Bond Fund Seeks high current income through in-
vestment principally in high yield
fixed income securities.
TCW Galileo Mortgage-Backed Securities Seeks income by investing primarily in
Fund short-term mortgage-backed securities.
TCW Galileo Total Return Seeks income by investing primarily in
Mortgage-Backed Securities Fund long-term mortgage-backed securities.
(formerly TCW Galileo Long Term
Mortgage-Backed Securities Fund)
</TABLE>
International
<TABLE>
<CAPTION>
TCW Galileo Fund Investment Objective
---------------- --------------------
<C> <S>
Non-Diversified International Equity
Funds
TCW Galileo Asia Pacific Equities Fund Seeks long-term capital appreciation,
primarily by investing in equity secu-
rities of companies in the Asia Pa-
cific region.
TCW Galileo Emerging Markets Equities Seeks long-term capital appreciation
Fund by investing in equity securities of
companies in emerging market countries
around the world.
TCW Galileo European Equities Fund Seeks long-term capital appreciation
by investing primarily in the securi-
ties of issuers located in Europe.
TCW Galileo International Equities Seeks long-term capital appreciation
Fund by investing in a mix of underlying
TCW Galileo Funds.
TCW Galileo Japanese Equities Fund Seeks long-term capital appreciation
by investing primarily in Japanese eq-
uity securities.
TCW Galileo Latin America Equities Seeks long-term capital appreciation,
Fund primarily by investing in Latin Ameri-
can equity securities.
Non-Diversified Fixed Income Fund
TCW Galileo Emerging Markets Income Seeks high total return from capital
Fund appreciation and current income by in-
vesting at least 65% of its total as-
sets in debt securities issued or
guaranteed by companies, financial in-
stitutions, and government entities in
emerging market countries.
</TABLE>
49
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
International
Notes to Financial Statements (Continued)
As of March 1, 1999, nine funds (TCW Galileo Select Equities Fund, TCW Galileo
Large Cap Value Fund, TCW Galileo Large Cap Growth Fund, TCW Galileo Aggressive
Growth Equities Fund, TCW Galileo Small Cap Growth Fund, TCW Galileo European
Equities Fund, TCW Galileo Fixed Income Fund, TCW Galileo Total Return Mort-
gage-Backed Securities Fund and TCW Galileo High Yield Bond Fund) commenced of-
fering two classes of shares, Institutional Class Shares and Advisory Class
Shares. Shares of each class of the Funds represent an equal pro rata interest
in the Funds and generally give the shareholder the same voting, dividend, liq-
uidation, and other rights. The institutional class shares are offered at the
current net asset value. The advisory class shares are also offered at the cur-
rent net asset value, but are subject to fees imposed under a distribution plan
adopted pursuant to Rule 12b-1 under the 1940 act.
Note 2--Significant Accounting Policies
The following is a summary of significant accounting policies which are in con-
formity with generally accepted accounting principles and which are consist-
ently followed by the Fund in the preparation of its financial statements. The
preparation of the financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Principles of Accounting: The Funds use the accrual method of accounting for
financial reporting purposes.
Security Valuations: Equity fund securities listed or traded on the New York,
American or other stock exchanges are valued at the latest sale price on that
exchange (if there were no sales that day, the security is valued at the latest
bid price). All other securities for which over-the-counter market quotations
are readily available, are valued at the latest bid price prior to the time of
valuation.
Securities for which market quotations are not readily available, including
circumstances under which it is determined by the Advisor that sale or bid
prices are not reflective of a security's market value, are valued at their
fair value as determined in good faith under procedures established by and un-
der the general supervision of the Company's Board of Directors.
Short-term debt securities with remaining maturities of 60 days or less at the
time of purchase are valued at amortized cost. Other short-term debt securities
are valued on a marked-to-market basis until such time as they reach a remain-
ing maturity of 60 days, whereupon they will be valued at amortized value using
their value of the 61st day prior to maturity.
Security Transactions and Related Investment Income: Security transactions are
recorded as of the trade date. Dividend income is recorded on the ex-dividend
date. Interest income is recorded on the accrual basis. Realized and unrealized
gains and losses on investments are recorded on the basis of specific identifi-
cation. The TCW Galileo Emerging Markets Income Fund recognizes as interest in-
come discounts on securities purchased using a constant yield to maturity ac-
cretion method. Premiums on securities purchased are not amortized.
Foreign Currency Translation: The books and records of each Fund are maintained
in U.S. dollars as follows: (1) the foreign currency market value of investment
securities, and other assets and liabilities stated in foreign currencies, are
translated using the daily spot rate; and (2) purchases, sales, income and ex-
penses are translated at the rate of exchange prevailing on the respective
dates of such transactions. The resultant exchange gains and losses are in-
cluded in
50
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
October 31, 1999
the Statements of Operations with the related net realized gain (loss). Pursu-
ant to U.S. federal income tax regulations, certain foreign exchange gains and
losses included in realized and unrealized gains and losses are included in, or
are a reduction of, ordinary income for federal income tax purposes. It is not
practicable to separately identify that portion of gains and losses of the
Funds that arise as a result of changes in the exchange rates from the fluctua-
tions that arise from changes in market prices of investments during the year.
Forward Foreign Currency Contracts: Certain Funds may enter into forward for-
eign currency contracts as a hedge against fluctuations in foreign exchange
rates. Forward foreign currency contracts are marked-to-market daily and the
change in market value is recorded by the Fund as an unrealized gain or loss.
When the contract is closed or delivery is taken, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed. Risks may arise
upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of the foreign currency relative to the U.S. dollar (see
Note 10).
Repurchase Agreements: The Funds may invest in repurchase agreements secured by
U.S. Government obligations and in other securities. Securities pledged as col-
lateral for repurchase agreements are held by the Funds' custodian bank until
maturity of the repurchase agreements. Provisions of the agreements ensure that
the market value of the collateral is sufficient in the event of default; how-
ever, in the event of default or bankruptcy by the other party to the agree-
ments, realization and/or retention of the collateral may be subject to legal
proceedings.
Security Lending: On December 17, 1998, the Funds' Board of Directors approved
securities lending to qualified brokers. The loans are collateralized at all
times with cash or securities with a market value at least equal to the market
value of the securities on loan. As with any extensions of credit, the Funds
may bear the risk of delay in recovery or even loss of rights in the collateral
if the borrowers of the securities fail financially. The Funds receive compen-
sation for lending their securities (see Note 3).
Options: Premiums received from call options written are recorded as a liabili-
ty. The amount of the liability is subsequently adjusted to reflect the current
market value of the option written. If the option expires unexercised, premiums
received are realized as a gain at expiration date. If the position is closed
prior to expiration, a gain or loss is realized based on premiums received,
less the cost to close the option. When an option is exercised, premiums re-
ceived are added to the proceeds from the sale of the underlying securities and
a gain or loss is realized. Call options purchased are accounted for in the
same manner as portfolio securities. The cost of securities acquired through
the exercise of call options is increased by premiums paid. There were no op-
tion contracts entered into during the year ended October 31, 1999.
Deferred Organization Costs: Organization costs of $10,000 per Fund for the TCW
Galileo Asia Pacific Equities Fund and the TCW Galileo Emerging Markets Equi-
ties Fund and $50,000 for the TCW Galileo Latin America Equities Fund have been
completely amortized as of October 31, 1999. Organizational costs of approxi-
mately $7,000, $9,000 and $7,000 for the TCW Galileo European Equities Fund,
TCW Galileo International Equities Fund and the TCW Galileo Japanese Equities
Fund, respectively, have been deferred and
51
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
International
Notes to Financial Statements (Continued)
Note 2--Significant Accounting Policies (Continued)
are also being amortized on a straight line basis over a five-year period from
the commencement of operations. Organizational costs for the TCW Galileo Emerg-
ing Markets Income Fund were de minimus and therefore, were not deferred. Those
costs were expensed as incurred.
Upon formation of the Funds, the Company sold and issued to the Advisor 10,008
shares of common stock (one share each of the TCW Galileo Asia Pacific Equities
Fund, the TCW Galileo Emerging Markets Equities Fund, the TCW Galileo European
Equities Fund, the TCW Galileo International Equities Fund, and the TCW Galileo
Japanese Equities Fund, and 2,000 shares of the TCW Galileo Latin America Equi-
ties Fund, collectively the "Initial Shares"). In the event the Advisor redeems
any of its Initial Shares from one or more of the Funds prior to the end of the
five-year period, the proceeds of the redemption payable in respect of such
shares will be reduced by any unamortized organization costs in the same ratio
as the number of Initial Shares being redeemed bears to the number of Initial
Shares outstanding at the time of the redemption.
Allocation of Operating Activity: Investment income, common expenses and real-
ized gains and losses are allocated among the classes of shares of the Funds
based on the relative net assets of each class. Distribution fees, which are
directly attributable to a class of shares are charged to that class' opera-
tions. All other expenses are charged to each Fund as incurred on a specific
identification basis.
Net Asset Value: The Net Asset Value of each Fund's shares is determined by di-
viding the net assets of the Fund by the number of issued and outstanding
shares on each business day as of 1:00 P.M. Pacific Standard Time.
Dividends and Distributions: The TCW Galileo Emerging Markets Income Fund de-
clares and pays, or reinvests, dividends from net investment income monthly.
All other Funds declare and pay, or reinvest, dividends from net investment in-
come annually. Any net long-term and net short-term capital gains earned by a
Fund will be distributed at least annually.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for foreign cur-
rency transactions, market discount, losses deferred to wash sales, excise tax
regulations and employing equalization in determining amounts to be distributed
to Fund shareholders. Permanent book and tax basis differences relating to
shareholder distributions will result in reclassifications to paid-in capital
and may affect net investment income per share. Undistributed net investment
income may include temporary book and tax basis differences which will reverse
in a subsequent period. Any taxable income or gain remaining at fiscal year end
is distributed in the following year.
Note 3--Security Lending
The Funds listed below loaned securities that were collateralized in cash which
was invested in short-term investments as of October 31, 1999.
<TABLE>
<CAPTION>
Security
Market Value of Collateral Lending
Loaned Securities Value Fees *
----------------- ---------- --------
<S> <C> <C> <C>
TCW Galileo Asia Pacific Equities Fund $1,540,312 $1,619,396 $ 4,897
TCW Galileo European Equities Fund 2,073,396 2,189,946 10,400
TCW Galileo Japanese Equities Fund 2,768,058 2,976,750 7,229
</TABLE>
* Net of broker fees.
Securities lending fees are included in interest income in the Statements of
Operations.
52
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
October 31, 1999
Note 4--Federal Income Taxes
It is the policy of each Fund to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its net taxable income, including any net realized gains on investments, to
its shareholders. Therefore, no federal income tax provision is required. At
October 31, 1999, net unrealized appreciation (depreciation) on investments for
federal income tax purposes was as follows (Amounts in Thousands):
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo TCW Galileo
Asia Pacific Emerging Markets Emerging Markets European
Equities Fund Equities Fund Income Fund Equities Fund
------------- ---------------- ---------------- -------------
<S> <C> <C> <C> <C>
Unrealized Appreciation $ 4,514 $ 4,606 $ 4,463 $15,397
Unrealized (Depreciation) (434) (1,009) (1,599) (2,452)
------- ------- ------- -------
Net Unrealized Appreciation $ 4,080 $ 3,597 $ 2,864 $12,945
======= ======= ======= =======
Cost of Investments for
Federal Income Tax
Purposes $19,654 $23,135 $77,197 $84,830
======= ======= ======= =======
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo
International Japanese Latin America
Equities Fund Equities Fund Equities Fund
------------- ---------------- ----------------
<S> <C> <C> <C>
Unrealized Appreciation $21,998 $12,596 $ 464
Unrealized (Depreciation) (352) (3,102) (842)
------- ------- -------
Net Unrealized
Appreciation
(Depreciation) $21,646 $ 9,494 $ (378)
======= ======= =======
Cost of Investments for
Federal Income Tax
Purposes $90,741 $70,056 $ 8,620
======= ======= =======
</TABLE>
At October 31, 1999, the following Funds had net realized loss carryforwards
for federal income tax purposes (Amounts in Thousands):
<TABLE>
<CAPTION>
Expiring in
--------------------------------
2003 2004 2005 2006 2007
------ ------ ---- ------ ------
<S> <C> <C> <C> <C> <C>
TCW Galileo Asia Pacific Equities Fund $ -- $ -- $ -- $4,364 $ --
TCW Galileo Emerging Markets Equities Fund -- -- -- 6,430 --
TCW Galileo Emerging Markets Income Fund -- -- -- 4,342 --
TCW Galileo Latin America Equities Fund 6,586 3,423 -- -- 1,259
</TABLE>
53
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
International
Notes to Financial Statements (Continued)
Note 5--Fund Expenses
The Funds pay to the Advisor, as compensation for services rendered, facilities
furnished and expenses borne by it, the following annual management fees as a
percentage of each Fund's daily net assets:
<TABLE>
<S> <C>
TCW Galileo Asia Pacific Equities Fund 1.00%
TCW Galileo Emerging Markets Equities Fund 1.00%
TCW Galileo Emerging Markets Income Fund 0.75%
TCW Galileo European Equities Fund 0.75%
TCW Galileo International Equities Fund 0.00%
TCW Galileo Japanese Equities Fund 0.75%
TCW Galileo Latin America Equities Fund 1.00%
</TABLE>
For the period November 1, 1998 through February 28, 1999, when the Advisor was
the administrator of the Funds, each Fund reimbursed the Advisor for the cost
of providing accounting services to the Fund in an amount not exceeding $35,000
for any fiscal year.
For the period November 1, 1998, through March 15, 1999, the ordinary operating
expenses of the following Funds were limited to the ratio as indicated below
(as a percentage of daily net assets):
<TABLE>
<S> <C>
TCW Galileo Emerging Markets Income Fund 1.78%
TCW Galileo European Equities Fund 1.20%
TCW Galileo International Equities Fund 1.16%
TCW Galileo Japanese Equities Fund 1.20%
</TABLE>
Effective March 15, 1999, the ordinary operating expenses for all Funds (each
share class) are limited to the average of the total expense ratios as reported
by Lipper Analytical Services, Inc. for each Fund's respective investment ob-
jective, which is subject to change on a monthly basis. At October 31, 1999,
the average expense ratios reported by Lipper Analytical Services, Inc. as they
relate to each Fund were:
<TABLE>
<S> <C>
TCW Galileo Emerging Markets Equities Fund 2.19%
TCW Galileo Emerging Markets Income Fund 1.70%
TCW Galileo European Equities Fund 1.71%
TCW Galileo International Equities Fund 1.68%
TCW Galileo Japanese Equities Fund 1.94%
</TABLE>
Effective July 1, 1999, ordinary operating expenses of the TCW Galileo Asia Pa-
cific Equities Fund and the TCW Galileo Latin America Equities Fund are limited
to 1.75% of each Fund's daily net assets.
Effective November 1, 1999, the ordinary operating expenses of the TCW Galileo
Emerging Markets Equities Fund are limited to 1.75% of the Fund's daily net
assets.
Certain officers and/or directors of the Company are officers and/or directors
of the Advisor.
54
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
October 31, 1999
Note 6--Distribution Plan
The Company has a distribution plan pursuant to Rule 12b-1 under the 1940 Act
with respect to the Advisory Class shares of each Fund. Under the terms of the
Distribution Plan, each Fund compensates the Distributor at a rate equal to
0.25% of the average daily net assets of the Fund attributable to its Advisory
Class shares for distribution and related services. Distribution fees for the
period March 1, 1999 (Commencement of offering of Advisory Class shares)
through October 31, 1999 were less than $1,000 for the TCW Galileo European Eq-
uities Fund and as a result, are not disclosed in the Statements of Operations.
Note 7--Purchases and Sales of Securities
Investment transactions (excluding short-term investments) for the year ended
October 31, 1999, were as follows:
<TABLE>
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo TCW Galileo
Asia Pacific Emerging Markets Emerging Markets European
Equities Fund Equities Fund Income Fund Equities Fund
------------- ---------------- ---------------- -------------
<S> <C> <C> <C> <C>
Purchases at Cost $23,855 $32,040 $103,305 $95,254
======= ======= ======== =======
Sales Proceeds $16,085 $30,600 $ 63,438 $72,358
======= ======= ======== =======
<CAPTION>
TCW Galileo TCW Galileo TCW Galileo
International Japanese Latin America
Equities Fund Equities Fund Equities Fund
------------- ---------------- ----------------
<S> <C> <C> <C>
Purchases at Cost $41,979 $93,779 $ 10,694
======= ======= ========
Sales Proceeds $24,921 $71,955 $ 12,674
======= ======= ========
</TABLE>
There were no purchases or sales of U.S. Government Securities for the year
ended October 31, 1999.
Note 8--Capital Share Transactions
TCW Galileo Asia Pacific Equities Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1999 October 31, 1998
------------------------- --------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
--------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares Sold 1,521,390 $11,280 1,605,901 $ 9,663
Shares Issued Upon
Reinvestment of
Dividends -- -- 440,561 2,425
Shares Redeemed (550,972) (4,008) (3,272,912) (19,259)
--------- ------- ---------- ---------
Net Increase (Decrease) 970,418 $ 7,272 (1,226,450) $ (7,171)
========= ======= ========== =========
</TABLE>
55
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
International
Notes to Financial Statements (Continued)
Note 8--Capital Share Transactions (Continued)
TCW Galileo Emerging Markets Equities Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1999 October 31, 1998
-------------------------- --------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares Sold 2,061,671 $ 14,832 1,729,977 $ 10,216
Shares Issued Upon
Reinvestment
of Dividends -- -- 3,688 27
Shares Redeemed (2,052,759) (14,055) (4,103,415) (28,369)
---------- -------- ---------- --------
Net Increase (Decrease) 8,912 $ 777 (2,369,750) $(18,126)
========== ======== ========== ========
</TABLE>
TCW Galileo Emerging Markets Income Fund
<TABLE>
<CAPTION>
June 3, 1998
(Commencement of
Year Ended Operations) through
October 31, 1999 October 31, 1998
-------------------------- -------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- --------- --------------
<S> <C> <C> <C> <C>
Shares Issued upon
Exchange of Limited
Partnership
Interests -- $ -- 2,821,844 $28,218
Shares Sold 7,899,551 56,896 1,871,153 12,305
Shares Issued Upon
Reinvestment
of Dividends 727,798 5,319 114,557 834
Shares Redeemed (2,849,086) (20,318) (237,929) (1,542)
---------- -------- --------- -------
Net Increase 5,778,263 $ 41,897 4,569,625 $39,815
========== ======== ========= =======
</TABLE>
TCW Galileo European Equities Fund
Institutional Class
<TABLE>
<CAPTION>
November 3, 1997
(Commencement of
Year Ended Operations) through
October 31, 1999 October 31, 1998
-------------------------- -------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- --------- --------------
<S> <C> <C> <C> <C>
Shares Issued upon
Exchange of Limited
Partnership
Interests -- $ -- 3,226,833 $32,268
Shares Sold 3,553,003 44,073 2,746,292 32,078
Shares Issued Upon
Reinvestment
of Dividends 150,626 1,791 -- --
Shares Redeemed (1,888,163) (23,753) (502,548) (6,200)
---------- -------- --------- -------
Net Increase 1,815,466 $ 22,111 5,470,577 $58,146
========== ======== ========= =======
</TABLE>
56
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
October 31, 1999
TCW Galileo European Equities Fund
Advisory Class
<TABLE>
<CAPTION>
Period Ending
October 31, 1999 (/1/)
-----------------------
Amount
Shares (in thousands)
------- --------------
<S> <C> <C>
Shares Sold 69,388 $861
Shares Redeemed (58,049) (720)
------- ----
Net Increase 11,339 $141
======= ====
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of the Advisory
Class shares) through October 31, 1999.
TCW Galileo International Equities Fund
<TABLE>
<CAPTION>
November 3, 1997
(Commencement of
Year Ended Operations) through
October 31, 1999 October 31, 1998
-------------------------- -------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- --------- --------------
<S> <C> <C> <C> <C>
Shares Issued upon
Exchange of Limited
Partnership
Interests -- $ -- 4,670,385 $46,704
Shares Sold 2,694,927 32,950 3,196,699 34,126
Shares Issued Upon
Reinvestment of
Dividends 3,535 40 -- --
Shares Redeemed (1,444,569) (17,417) (906,223) (9,877)
---------- -------- --------- -------
Net Increase 1,253,893 $ 15,573 6,960,861 $70,953
========== ======== ========= =======
</TABLE>
TCW Galileo Japanese Equities Fund
<TABLE>
<CAPTION>
November 3, 1997
(Commencement of
Year Ended Operations) through
October 31, 1999 October 31, 1998
-------------------------- -------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- --------- --------------
<S> <C> <C> <C> <C>
Shares Issued upon
Exchange of Limited
Partnership
Interests -- $ -- 960,559 $ 9,606
Shares Sold 2,769,489 34,755 2,813,291 23,503
Shares Issued upon
Reinvestment of
Dividends 192 3 7,216 52
Shares Redeemed (1,130,500) (13,569) (383,522) (3,189)
---------- -------- --------- -------
Net Increase 1,639,181 $ 21,189 3,397,544 $29,972
========== ======== ========= =======
</TABLE>
57
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
International
Notes to Financial Statements (Continued)
Note 8--Capital Share Transactions (Continued)
TCW Galileo Latin America Equities Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1999 October 31, 1998
-------------------------- --------------------------
Amount Amount
Shares (in thousands) Shares (in thousands)
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares Sold 740,603 $ 7,251 1,123,813 $ 13,900
Shares Issued Upon
Reinvestment
of Dividends -- -- 28,695 345
Shares Redeemed (1,269,710) (9,767) (4,200,900) (49,154)
---------- ------- ---------- --------
Net (Decrease) (529,107) $(2,516) (3,048,392) $(34,909)
========== ======= ========== ========
</TABLE>
Note 9--Restricted Securities
The following restricted securities held by the Funds as of October 31, 1999,
were valued both at the date of acquisition and October 31, 1999, in accordance
with the security valuation policy of the Funds described in Note 2. The re-
stricted securities include securities purchased in private placement transac-
tions without registration under the Securities Act of 1933, as well as Rule
144A securities. Such securities generally may be sold only in a privately ne-
gotiated transaction with a limited number of purchasers or in a public offer-
ing registered under the Securities Act of 1933. Each Fund will bear any costs
incurred in connection with the disposition of such securities.
TCW Galileo Asia Pacific Equities Fund:
<TABLE>
<CAPTION>
Number Date of
of Shares Investment Acquisition Cost
--------- -------------------------------------------- ----------- --------
<C> <S> <C> <C>
212 Asustek Computer, Incorporated (144A) (GDR) 11/10/98 $ 1,090
(Taiwan)
238,221 Taiwan Semiconductor Manufacturing Company, 02/10/99 636,814
Limited (Local Shares) (Taiwan)
6,590 Winbond Electronics Corporation (144A) (GDR) 01/29/99 75,455
(Taiwan)
</TABLE>
The total value of restricted securities is $1,178,698 which represents 5.3% of
net assets of the Fund at October 31, 1999.
TCW Galileo Emerging Markets Equities Fund:
<TABLE>
<CAPTION>
Number Date of
of Shares Investment Acquisition Cost
--------- -------------------------------------------- ----------- --------
<C> <S> <C> <C>
196 Asustek Computer, Incorporated (144A) (GDR) 11/10/98 $ 986
(Taiwan)
3,691 Mol Magyar Olaj-es Gazipari Rt. (144A) (GDR) 10/17/97 66,669
(Hungary)
362,200 Taiwan Semiconductor Manufacturing Company, 01/20/99 924,261
Limited (Local Shares) (Taiwan)
15,965 Telekomunikacja Polska, S.A. (144A) (GDR) 11/09/98 70,885
(Poland)
3,780 Winbond Electronics Corporation (144A) (GDR) 01/29/99 43,281
(Taiwan)
</TABLE>
The total value of restricted securities is $1,830,122 which represents 6.9% of
net assets of the Fund at October 31, 1999.
58
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
October 31, 1999
TCW Galileo Emerging Markets Income Fund:
<TABLE>
<CAPTION>
Principal Date of
Amount Investment Acquisition Cost
------------- --------------------------------------- ----------- ----------
<C> <S> <C> <C>
EUR 1,300,000 Pannon Finance B.V., (144A), 7.75%, due 07/26/99 $1,384,890
08/03/04 (Hungary)
$ 1,130,000 Ce Casecnan Water & Energy, Series A, 10/30/98 1,003,530
11.45%, due 11/15/05 (Philippines)
210,000 PDVSA Finance, Limited, (144A), 9.75%, 07/06/99 205,813
due 02/15/10 (Venezuela)
1,245,000 PDVSA Finance, Limited, (Reg. S), 07/06/99 1,228,617
9.75%, due 02/15/10 (Venezuela)
1,000,000 Republic of El Salvador (144A), 9.5%, 08/04/99 923,625
due 08/15/06 (El Salvador)
820,000 Russian Federation, (144A), 12.75%, due 07/23/98 727,340
06/24/28, Par Put 06/24/08 (Russia)
10,320,000 Russian Federation, (Reg S), 12.75%, 07/23/98 4,056,144
due 06/24/28, Par Put 06/24/08 (Russia)
1,000,000 Trinidad & Tobago (144A), 9.875%, due 09/17/99 976,920
10/01/09 (Trinidad & Tobago)
</TABLE>
EUR - Euro Currency.
The total value of restricted securities is $11,879,177 which represents 14.6%
of net assets of the Fund at October 31, 1999.
Note 10--Forward Foreign Currency Contracts
The Fund listed below invested in forward foreign currency contracts during the
year ended October 31, 1999. The contracts are used for the purpose of hedging
against foreign exchange risk arising from the Fund's investment in foreign se-
curities. These contracts are "marked-to-market" at the valuation date at the
applicable translation rates and any resulting unrealized gains or losses are
recorded in the Fund's financial statements. The Fund records realized gains or
losses at the time the forward contract is closed. There were no realized gains
or losses recorded in the financial statements for the year ended October 31,
1999. A forward contract is extinguished through a sale or the expiration of
the contract. Risks may arise upon entering into these contracts from the po-
tential inability of counterparties to meet the terms of their contracts and
from unanticipated movements in the value of the foreign currency relative to
the U.S. dollar. The following forward foreign currency contract was outstand-
ing as of October 31, 1999:
TCW Galileo Emerging Markets Income Fund:
<TABLE>
<CAPTION>
Unrealized
Expiration Contract In Exchange Appreciation
Date to Sell for U.S.$ on Contract
- ---------- ----------------------- ----------- ------------
<S> <C> <C> <C>
08/03/2001 Euro Currency 1,300,000 $1,459,250 $36,660
</TABLE>
59
<PAGE>
TCW Galileo Asia Pacific Equities Fund
- --------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Year Ended October 31,
-------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value per
Share, Beginning of
Year $ 5.09 $ 7.37 $ 9.61 $ 8.67 $ 10.19
------- ------- ------- ------- -------
Income (Loss) from
Investment Operations:
Net Investment Income
(Loss) (0.02) 0.02 (0.01) 0.06 0.06
Net Realized and
Unrealized Gain (Loss)
on Investments 3.30 (1.04) (2.10) 0.93 (1.19)
------- ------- ------- ------- -------
Total from Investment
Operations 3.28 (1.02) (2.11) 0.99 (1.13)
------- ------- ------- ------- -------
Less Distributions:
Distributions from Net
Investment Income -- -- (0.08) (0.05) (0.01)
Distributions in Excess
of Net Investment
Income -- -- (0.05) -- (0.22)
Distributions from Net
Realized Gains -- (1.26) -- -- (0.16)
------- ------- ------- ------- -------
Total Distributions -- (1.26) (0.13) (0.05) (0.39)
------- ------- ------- ------- -------
Net Asset Value per
Share, End of Year $ 8.37 $ 5.09 $ 7.37 $ 9.61 $ 8.67
======= ======= ======= ======= =======
Total Return 64.44% (14.80)% (22.40)% 11.36% (10.98)%
Ratios/Supplemental Data:
Net Assets, End of Year
(in thousands) $22,070 $ 8,482 $21,327 $48,266 $46,709
Ratio of Net Expenses to
Average Net Assets 2.03% (1) 2.48 % 1.49 % 1.43% 1.47 % (1)
Ratio of Net Investment
Income (Loss) to
Average Net Assets (0.34)% 0.36 % (0.02)% 0.66% 0.74 %
Portfolio Turnover Rate 119.72 % 190.33 % 81.92 % 84.81% 102.01 %
</TABLE>
(1) The Investment Advisor had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit annual
operating expenses of the Fund as disclosed in Note 5 of the Notes to the
Financial Statements for the year ended October 31, 1999 and 1.40% of aver-
age net assets through December 31, 1994. Had such action not been taken,
total operating expenses, as a percentage of net assets, would have been
2.05% for the year ended October 31, 1999 and 1.51% for the year ended Oc-
tober 31, 1995.
60
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Emerging Markets Equities Fund
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Year Ended October 31,
--------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value per Share,
Beginning of Year $ 5.57 $ 8.32 $ 8.18 $ 7.19 $ 9.73
------- ------- ------- ------- -------
Income (Loss) from
Investment Operations:
Net Investment Income
(Loss) (0.02) 0.09 0.03 0.07 0.04
Net Realized and
Unrealized Gain (Loss) on
Investments 2.32 (2.83) 0.22 0.94 (2.58)
------- ------- ------- ------- -------
Total from Investment
Operations 2.30 (2.74) 0.25 1.01 (2.54)
------- ------- ------- ------- -------
Distributions from Net
Investment Income -- (0.01) (0.11) (0.02) --
------- ------- ------- ------- -------
Less Distributions:
Net Asset Value per Share,
End of Year $ 7.87 $ 5.57 $ 8.32 $ 8.18 $ 7.19
======= ======= ======= ======= =======
Total Return 41.29% (32.97)% 2.82% 14.14% (26.11)%
Ratios/Supplemental Data:
Net Assets, End of Year (in
thousands) $26,591 $18,763 $47,726 $57,639 $51,873
Ratio of Net Expenses to
Average Net Assets 2.02% (/1/) 1.70 % 1.50% 1.41% 1.55 %
Ratio of Net Investment
Income (Loss) to Average
Net Assets (0.24)% 1.15 % 0.36% 0.82% 0.54 %
Portfolio Turnover Rate 152.93 % 102.28 % 79.80% 83.76% 74.24 %
</TABLE>
(1) The Investment Advisor had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund as disclosed in Note 5 of the Notes to
the Financial Statements for the year ended October 31, 1999. Had such ac-
tion not been taken, total operating expenses, as a percentage of net as-
sets, would have been 2.50% for the year ended October 31, 1999.
61
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Emerging Markets Income Fund
- --------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
June 3, 1998
(Commencement of
Year Ended Operations)
October 31, through
1999 October 31, 1998
----------- ----------------
<S> <C> <C>
Net Asset Value per Share, Beginning of Period $ 6.58 $ 10.00
------- -------
Income (Loss) from Investment Operations:
Net Investment Income 0.84 0.37
Net Realized and Unrealized Gain (Loss) on
Investments 1.25 (3.41)
------- -------
Total from Investment Operations 2.09 (3.04)
------- -------
Less Distributions:
Distributions from Net Investment Income (0.83) (0.37)
Distributions in Excess of Net Investment
Income -- (0.01)
------- -------
Total Distributions (0.83) (0.38)
------- -------
Net Asset Value per Share, End of Period $ 7.84 $ 6.58
======= =======
Total Return 33.31% (30.67)% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $81,113 $30,090
Ratio of Expenses to Average Net Assets 1.01% 1.53% (/2/)
Ratio of Net Investment Income to Average Net
Assets 11.37% 11.90% (/2/)
Portfolio Turnover Rate 113.00% 68.46% (/1/)
</TABLE>
(1) For the period June 3, 1998 (Commencement of Operations) through October
31, 1998 and not indicative of a full year's operating results.
(2) Annualized.
62
See accompanying notes to financial statements.
<PAGE>
TCW Galileo European Equities Fund
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Institutional Class
Financial Highlights
<TABLE>
<CAPTION>
November 3, 1997
Year Ended (Commencement of
October 31, Operations) through
1999 October 31, 1998
----------- -------------------
<S> <C> <C>
Net Asset Value per Share, Beginning of
Period $ 11.70 $ 10.00
------- -------
Income from Investment Operations:
Net Investment Income 0.07 0.06
Net Realized and Unrealized Gain on
Investments 1.65 1.64
------- -------
Total from Investment Operations 1.72 1.70
------- -------
Less Distributions:
Distributions from Net Investment Income (0.03) --
Distributions from Net Realized Gains (0.28) --
------- -------
Total Distributions (0.31) --
------- -------
Net Asset Value per Share, End of Period $ 13.11 $ 11.70
======= =======
Total Return 15.16% 17.00% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $95,489 $63,994
Ratio of Expenses to Average Net Assets 1.01% 1.06% (/2/)
Ratio of Net Investment Income to Average Net
Assets 0.58% 0.52% (/2/)
Portfolio Turnover Rate 95.21% 72.05% (/1/)
</TABLE>
(1) For the period November 3, 1997 (Commencement of Operations) through
October 31, 1998 and not indicative of a full year's operating results.
(2) Annualized.
63
See accompanying notes to financial statements.
<PAGE>
TCW Galileo European Equities Fund
- --------------------------------------------------------------------------------
Advisory Class
Financial Highlights
<TABLE>
<CAPTION>
March 1, 1999
through
October 31, 1999
-----------------
<S> <C>
Net Asset Value per Share, Beginning of Period $12.37
------
Income from Investment Operations:
Net Investment Income 0.09
Net Realized and Unrealized Gain on Investments 0.68
------
Total from Investment Operations 0.77
------
Net Asset Value per share, End of Period $13.14
======
Total Return 6.23% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 149
Ratio of Net Expenses to Average Net Assets 1.69% (/2/)(/3/)
Ratios of Net Investment Income to Average Net Assets 1.12% (/2/)
Portfolio Turnover Rate 95.21%
</TABLE>
(1) For the period March 1, 1999 (Commencement of offering of Advisory Class
shares) through October 31, 1999 and not indicative of a full year's
operating results.
(2) Annualized.
(3) The Investment Advisor voluntarily agreed to reduce its fee, or to pay the
operating expenses of the Fund as disclosed in Note 5 of the Notes to the
Financial Statements for the year ended October 31, 1999. Had such action
not been taken, total annualized operating expenses, as a percentage of
average net assets, would have been 54.30% for the period March 1, 1999
through October 31, 1999.
64
See accompanying notes to financial statements.
<PAGE>
TCW Galileo International Equities Fund
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
November 3, 1997
(Commencement of
Year Ended Operations) through
October 31, 1999 October 31, 1998
---------------- -------------------
<S> <C> <C>
Net Asset Value per Share, Beginning of
Period $ 10.75 $ 10.00
-------- -------
Income from Investment Operations:
Net Investment Income 0.21 0.05
Net Realized and Unrealized Gain on
Investments 2.73 0.70
-------- -------
Total from Investment Operations 2.94 0.75
-------- -------
Less Distributions:
Distributions from Net Investment Income (0.02) --
-------- -------
Net Asset Value per Share, End of Period $ 13.67 $ 10.75
======== =======
Total Return 27.39% 7.50% (1)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $112,336 $74,853
Ratio of Expenses to Average Net Assets 0.18% 0.17% (2)
Ratio of Net Investment Income to Average
Net Assets 1.70% 0.50% (2)
Portfolio Turnover Rate 27.78% 21.12% (1)
</TABLE>
(1) For the period November 3, 1997 (Commencement of Operations) through Octo-
ber 31, 1998 and not indicative of a full year's operating results.
(2) Annualized.
65
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Japanese Equities Fund
- --------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
November 3, 1997
Year Ended (Commencement of
October 31, Operations) through
1999 October 31, 1998
----------- -------------------
<S> <C> <C>
Net Asset Value per Share, Beginning of
Period $ 8.43 $ 10.00
------- -------
Income (Loss) from Investment Operations:
Net Investment (Loss) (0.02) (0.04)
Net Realized and Unrealized Gain (Loss) on
Investments 6.87 (1.46)
------- -------
Total from Investment Operations 6.85 (1.50)
------- -------
Less Distributions:
Distributions from Net Investment Income -- (0.07)
------- -------
Net Asset Value per Share, End of Period $ 15.28 $ 8.43
======= =======
Total Return 81.26% (14.88)% (/1/)
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $76,975 $28,648
Ratio of Expenses to Average Net Assets 1.04% 1.20 % (2)(3)
Ratio of Net Investment (Loss) to Average
Net Assets (0.17)% (0.48)% (2)
Portfolio Turnover Rate 149.76% 178.53 % (1)
</TABLE>
(1) For the period November 3, 1997 (Commencement of Operations) through Octo-
ber 31, 1998 and not indicative of a full year's operating results.
(2) Annualized.
(3) The Investment Advisor had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund, to the extent necessary to limit the
annual ordinary operating expenses of the Fund to 1.20% of net assets
through October 31, 1998. Had such action not been taken, total annualized
operating expenses as a percentage of average net assets would have been
1.51% for the period November 3, 1997 (Commencement of Operations) through
October 31, 1998.
66
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Latin America Equities Fund
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Year Ended October 31,
-------------------------------------------------
1999 1998 1997 1996 1995
------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value per Share,
Beginning of Year $ 8.57 $ 12.51 $ 10.01 $ 7.92 $ 14.99
------ ------- ------- ------- -------
Income (Loss) from
Investment Operations:
Net Investment Income 0.09 0.13 0.11 0.11 0.06
Net Realized and Unrealized
Gain (Loss) on Investments 0.71 (3.80) 2.50 2.03 (5.92)
------ ------- ------- ------- -------
Total from Investment
Operations 0.80 (3.67) 2.61 2.14 (5.86)
------ ------- ------- ------- -------
Less Distributions:
Distributions from Net
Investment Income -- (0.27) (0.11) (0.05) --
Distributions in Excess of
Net Realized Gains -- -- -- -- (1.21)
------ ------- ------- ------- -------
Total Distributions -- (0.27) (0.11) (0.05) (1.21)
------ ------- ------- ------- -------
Net Asset Value per Share,
End of Year $ 9.37 $ 8.57 $ 12.51 $ 10.01 $ 7.92
====== ======= ======= ======= =======
Total Return 9.34% (29.95)% 26.24% 27.08% (40.95)%
Ratios/Supplemental Data:
Net Assets, End of Year (in
thousands) $7,939 $11,796 $55,336 $68,323 $38,942
Ratio of Net Expenses to
Average Net Assets 2.20% (/1/) 1.64% 1.46% 1.44% 1.58%
Ratio of Net Investment
Income to Average Net
Assets 1.05% 1.13% 0.87% 1.12% 0.59%
Portfolio Turnover Rate 162.12% 32.33% 21.17% 44.32% 75.62%
</TABLE>
(1) The Investment Advisor had voluntarily agreed to reduce its fee, or to pay
the operating expenses of the Fund as disclosed in Note 5 of the Notes to
the Financial Statements. Had such action not been taken, the total operat-
ing expenses, as a percentage of average net assets, would have been 3.24%
for the year ended October 31, 1999.
67
See accompanying notes to financial statements.
<PAGE>
TCW Galileo Funds, Inc.
- --------------------------------------------------------------------------------
International
Independent Auditors' Report
To the Board of Directors and Shareholders of TCW Galileo Funds, Inc.
We have audited the accompanying statements of assets and liabilities, includ-
ing the schedules of investments, of TCW Galileo Asia Pacific Equities Fund,
TCW Galileo Emerging Markets Equities Fund, TCW Galileo Emerging Markets Income
Fund, TCW Galileo European Equities Fund, TCW Galileo International Equities
Fund, TCW Galileo Japanese Equities Fund, and TCW Galileo Latin America Equi-
ties Fund (the "Galileo International Funds") (seven of twenty funds comprising
TCW Galileo Funds, Inc.) as of October 31, 1999 and the related statements of
operations for the periods then ended, the statements of changes in net assets
for each of the periods ended October 31, 1999 and 1998, and the financial
highlights for each of the respective periods in the periods ended October 31,
1999. These financial statements and financial highlights are the responsibil-
ity of the Funds' management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial high-
lights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1999 by correspondence with the custodians and brokers. Where re-
plies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Galileo International Funds as of October 31, 1999 and the
results of their operations, the changes in their net assets, and the financial
highlights for the respective stated periods in conformity with generally ac-
cepted accounting principles.
/s/ Deloitte & Touche LLP
December 21, 1999
Los Angeles, California
68
<PAGE>
[LOGO OF TCW GALILEO FUNDS INC.]
- --------------------------------------------------------------------------------
Tax Information Notice (Unaudited)
On account of the year ended October 31, 1999, the following fund paid capital
gain distributions within the meaning 852 (b)(3)(c) of the Internal Revenue
Code. The Fund designated as a capital gain distribution a portion of earnings
and profits paid to shareholders in redemption of their shares.
<TABLE>
<CAPTION>
Amount Per
Fund Share
---- ----------
<S> <C>
TCW Galileo European Equities Fund $0.69
</TABLE>
This information is given to meet certain requirements of the Internal Revenue
Code and should not be used by shareholders for preparing their income returns.
For income tax preparation purposes, please refer to the calendar year end in-
formation you will receive from the Fund's transfer agent in January 2000.
69
